By Pemphero Malimba
European Investment Bank (EIB Global) and Centenary Bank yesterday signed a €7.5 million (approximately K15 billion) financing agreement which is expected to strengthen the bank’s lending to smallholder farmers and micro agri-food enterprises.
Of the total financing, 50 percent is earmarked to benefit micro, small and medium enterprises (MSMEs) and promote sustainable, climate-resilient agriculture in Malawi.
Another 50 percent is meant for the advancement of the economic empowerment of women in the country.
Speaking at the event in Lilongwe, EIB Head of Southern Africa Region Hub Jim Hodges said the financing sought to support sustainable businesses that had the potential to contribute to the country’s economic growth.
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“We are really looking for sustainability. We need these investments to be sustainable. They need to help, in terms of creating jobs and income,” he said.
Centenary Bank Board Chairperson Francis Pelekamoyo said the bank expected the financing to benefit at least two million people in rural areas of the country.
“The facility also has a component of financial literacy. So, the first part of it will be [used for] training our potential borrowers on what they are supposed to do and, in so doing, we are going to be selecting the groups,” Pelekamoyo said.
Centenary Bank acting Managing Director Beatrix Mosiwa said the partnership was key to transforming micro, small and medium enterprises in the country.
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“We believe their businesses can drive local innovation and contribute significantly to the country’s economic growth,” Mosiwa said.
According to Mosiwa, the bank believes that the financing would enable the enterprises to engage in productive activities that support economic growth.
She said through the technical assistance component of the Partnership, the bank would be strengthening its agricultural lending activities and support the beneficiaries to adopt more climate resilient agricultural practices.
European Union (EU) Ambassador to Malawi Daniel Aristi-Gaztelumendi pledged the EUs continued support towards Malawi.
Aristi-Gaztelumendi said through ongoing programmes and incoming projects, the EU was helping organise farmers to become more productive, competitive and commercially viable.
“We are working to help businesses to access financing. We remain trusted and committed to supporting Malawi in its economic vision and transformation,” he said.
Finance Minister Joseph Mwanamvekha urged Centenary Bank to minimise bureaucracies in the provision of funds to beneficiaries.
He said the partnership was crucial as it acted as a bridge connecting undeserving communities with the bank.
He pledged the government’s commitment to creating an enabling environment for financial institutions in the country.
