By Benadetta Chiwanda Mia:
The Reserve Bank of Malawi (RBM) has reported a significant rise in financial consumer complaints to over 74,000 recorded cases in 2024 alone.
This is reflecting both the growth of digital financial services and persistent weaknesses in service delivery across financial institutions.
According to RBM’s Financial Institutions Annual Report for 2024 published on Thursday, a total of 74,906 complaints were registered across the financial sector in 2024, out of which 67,215 cases came from the banking sector, representing over 89 percent of recorded cases,
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The rest came from insurance, Saccos and microfinance sectors.
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The majority of banking sector complaints, at 46,969 cases, representing 70 percent, were linked to failed digital financial services (DFS), in which customers’ accounts were debited without receiving the intended service.
Although this proportion was slightly lower than the 78 percent recorded in 2023, RBM observed that delayed refunds by financial institutions worsened the problem.
Despite the surge in grievances, the registrar of financial institutions indicated that 95.9 percent of all complaints were resolved by the financial institutions themselves.
However, 1,301 complaints were escalated to the Registrar including 77 unresolved cases carried over from the previous year.
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This represented a huge increase from 700 cases handled by the registrar in 2023.
Of the cases handled by the Registrar, 655 (63.6 percent) were resolved, a decline from the 75 percent resolution rate in 2023.
The main sources of disputes included financial abuse (53 percent), misunderstandings between institutions and consumers (22.9 percent), poor customer care (12.7 percent) low financial literacy (5.2 percent), and fraud (1 percent)
Bankers Association of Malawi (Bam) Chief Executive Officer Lynes Nkungula said banks are taking measures to upgrade their digital platforms to enhance transaction reliability and reduce failure rates.
“We view this feedback as a valuable indication of the areas where we need to improve our service delivery to maintain public trust and confidence,” Nkungula said.
Consumers Association of Malawi Executive Director John Kapito accused both financial institutions and the regulator of failing ordinary consumers.
“We have witnessed a lot of abuse in the financial sector, especially within the banking sector. The complaints the Reserve Bank of Malawi has recorded are just a fraction of the challenges consumers are going through,” Kapito said.
