Cheque use down by 38%

Bram Fudzulani

The use of cheques by financial services consumers has dropped by 38 percent within five years from 2015, the Reserve Bank of Malawi says.

The central bank indicates that the trend is expected to continue following implementation of the electronic funds transfer (EFT) system by the government in September last year.

The drop in use of cheques has been attributed to high growth in both volume and value of electronic transactions over the period, with a corresponding noticeable substitution effect on paper-based payment instruments.


“With this development, we now stand on a sound ground to phase out cheques from the national payments system due to risks associated with them,” reads a statement from the central bank.

Over the years, digital money uptake has increased.

For example, retail payments streams have risen by 1,138.6 percent between 2015 and 2021 while the number of mobile money subscribers and agents has risen by 368.9 percent, and 564.9 percent, respectively.


Out of the payments made during the second quarter of 2022 (K5.7 trillion excluding RTGS and Cheque transactions), 87.6 percent of the transactions were through digital channels, and cash withdrawals constituted 12.4 percent.

The statement adds that even though there has been such tremendous growth in the use of digital means of payment, there are also challenges associated with it.

The challenges include cyber security concerns, high user fees and network as well as power disruptions and unwillingness by some business operators to accommodate clients who want to transact digitally.

“The Reserve Bank continues to work with various stakeholders to resolve some of these challenges,” it adds.

ICT Association of Malawi (Ictam) President Bram Fudzulani said low literacy levels remain a hindrance to the national financial inclusion agenda.

He added that, aside from the regulations that should encourage digital services uptake, the government should make sure that the services or gadgets used to access the services are affordable.

“If we want to improve digital services uptake, let efforts cover things such as reduction of transaction costs, removal of taxes that go into buying of mobile gadgets. Government should also reduce the money that banks pay to telecommunication companies for USSD services,” Fudzulani said.

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