Financial inclusion for rural populations


Our economy is predominantly driven by agriculture; in particular, cash crops such as tobacco and maize.

In 2020, some 80 percent of Malawian households were involved in agriculture, and about 86 percent relied on farming or casual farm work for their income.

Conversely, financial inclusion reports reveal that only about one-fifth – or 19 percent – of the population are bank holders; 55 percent do not use any financial products, and 74 percent save their wealth in cash and kind.


Low uptake of financial services presents a serious threat to agricultural production in the country as limited access to these services means farmers cannot take advantage of business opportunities, invest and save for the future, and insure against risks.

The stimulus for rural growth is agricultural credit and mobile money, to allow farmers to make productivity-enhancing investments, making financial inclusion of rural areas a crucial socio-economic goal.

The Malawi Government identifies inclusive finance as essential for increasing agricultural productivity and production.


The National Strategy for Financial Inclusion aimed to develop an inclusive financial system between 2016 and 2020 by increasing the financial and investment capacity of the private sector in urban and rural areas and promote innovation in the financial industry, among others.

Consequently, our country has undertaken reforms in its financial sector to foster financial inclusivity in the past decade.

Yet, despite some recent developments and innovations aimed at expanding the financial space, many continue to face severe constraints in accessing financial services, including savings, credit, insurance, and payment services. What more can be done?

Stakeholders can expand the reach of financial services by addressing barriers such as high costs of financial services, lack of trust in financial systems and lack of information on financial services — often coupled with low levels of financial literacy.

One Acre Fund, the agricultural non-profit we work for, has fostered smallholder investment in sustainable farming systems since 2013.

The organisation supplies Malawian smallholder farmers – 56,000 this year – with training and farming inputs on credit, which farmers repay throughout the major cropping season.

By consistently delivering quality inputs affordably and on credit, we have built trust with farmers and allowed their integration into the formal financial space.

Lack of inclusive formal financial services in rural areas inhibits farmers from saving and investing.

In our experience, farmers with the means to save cultivate significantly more land and invest more in agricultural inputs and livelihoods.

By granting farmers access to input credit, we enable them to earn enough to save, helping rural communities to accelerate their own development.

In developing national financial inclusion strategies, we can bring together the government, financial services providers, and unbanked consumers to increase the impact of financial access reforms.

Countries that have made significant progress towards attaining financial inclusion, such as Kenya – which has an inclusion rate of about 83 percent – have enacted policies to enable providers to reach as many consumers as possible from all population segments, allowing financial services, such as mobile money, to thrive.

In Rwanda, where the government has been implementing financial inclusion initiatives since 2016, about 90 percent of the adult population was financially included as of 2020.

Integration into the financial space can provide farmers with the tools to manage their vulnerability to farming shocks through improved access to savings, credit and insurance products.

In particular, access to mobile money accounts is a key driver of the digitisation of agricultural payments, allowing and empowering farmers to control their financial planning and security.

Digitising financial services can help overcome the costs and physical barriers that have beset otherwise valuable financial inclusion efforts.

What is more, by strengthening partnerships with digital payment service providers, agribusinesses can negotiate better pricing structures to ensure affordable and accessible mobile financial services.

To bolster this effort, policymakers can work to strengthen the rural digital financial services ecosystem.

For example, the operational requirements for start-ups could be simplified and transaction costs for users reduced.

This would drive up the number of digital financial services outlets and increase the number of agents available in rural areas.

Rural poverty and increasing food security through increased smallholder incomes are a recurring national priority for Malawi.

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