The United States (US) International Development Finance Corporation (DFC) Board of Directors recently approved a $5 million loan guarantee to Malawi, which aims at furthering micro, small and medium enterprise development.
This is part of the $1.4 billion earmarked for projects that advance development impact across Africa, Asia, Eastern Europe and Latin America and the Caribbean.
The loan portfolio, guaranteed to NBS Bank plc, according to the American development financing institution, will increase lending to MSMEs focused on agriculture, clean cooking, fisheries and sustainable forestry sectors.
In a statement released by the US International Finance Development Corporation, 34 transactions have been approved this quarter, to utilise DFC’s tools including equity and funds’ investments to address priorities and global developments eyed by the US government such as national security and foreign policy priorities such as food security, climate change, gender equity and increasing access to financing around the world.
According to DFC Chief Executive Officer Scott Nathan, the transactions will bring along necessary impact in various sectors.
“These transactions showcase how DFC strategically catalyses private capital where it matters most,” Nathan said.
When contacted, NBS Bank Public Relations Officer Olivia Kadzamira could not divulge more, stating the project is still a work in progress.
“We are still finalising on how we can utilise the grant but I can confirm that, indeed, the DFC considered us,” she said.
Economist at Malawi University of Business and Applied Sciences Betchani Tchereni tipped the bank to consider targeting the manufacturing industry.
“It is a welcome development that there are found to be some resources for this those activities. However, it’s concerning that the resources are not targeting the manufacturing industry directly. This is what our economy really needs,” he said.
Malawi, Tanzania, Nigeria and Zimbabwe are among countries benefitting from financing for African micro-small and medium-sized enterprises through the initiative.