Access to financial institutions by the adult population of Malawi has grown to 50 percent from 18 percent within the last 10 years, the Bankers Association of Malawi (BAM) says.
This comes at the back of increased use of digital services and accommodative conditions by banks.
According to BAM Chief Executive Officer Lyness Nkungula who is quoted in the association’s magazine, the financial services sector has, within the years, become a force to reckon with in contributing towards national economic growth and poverty reduction.
Nkungula said digital financial services and products have not only become handy but are also a game-changer, contributing to the government’s dream of financial inclusion.
“With the integration of the banking systems with those of the ICT (Information Communication Technology) and mobile phone operators, commercial banks are almost all over now, except not physically,” Nkungula said.
She indicates that even though there is such growth in the usage of financial institutions, there are a lot of challenges that the sector is facing that derail the progress.
Nkungula outlines lack of financial literacy and unemployment as key bottlenecks to the drive, adding that a recent study by the financial sector regulator, the Reserve Bank of Malawi, shows that low education reduces the likelihood of individuals using some financial products and access to services.
According to figures from the Reserve Bank of Malawi National Payment Systems Report for 2021, a total of 183.3 million transactions were made during the second quarter of 2021 with a corresponding total value of K21.2 trillion during the same period.
The report indicates that during the period the number of registered subscribers for non-bank mobile money services increased by 7.5 percent to 9.3 million while the number of mobile money agents rose to 115,435.
In the banking sector, the report indicates that the total number of subscribers for internet banking services increased to 268,259 and the total number of mobile banking subscribers rose to 1.12 million during the period under review.
While acknowledging that the use of financial institutions is indeed growing, the central bank lamented that the sector’s penetration in rural areas is limited which slows the financial inclusion drive.
“Stakeholders in the payments industry are therefore encouraged to collaborate and continue to design and implement appropriate measures that will support increased growth of digital financial services in the country,” the report reads.
Government through RBM embarked on a financial inclusion drive which aims at making sure that the Malawi population has trusted and reliable means of saving and transacting money.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.