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Government revives Malawi Savings Bank debt collection

Malawi Savings Bank

Felix Mlusu

Minister of Finance, Felix Mlusu, has told Parliament that government has revived operations of a debt collection vehicle to help recover K11 billion that companies and individuals owe Malawians after the sell of Malawi Savings Bank to FDH Holdings.

Mlusu indicated that out of 13 companies and individuals owing the government, only one has settled the debt.

Among others, he indicated that Mulli Brothers Limited (MBL) owes the government K10 billion while the rest have accumulated debt of K1 billion.

“The process has already started. The debt collection company that was instituted by the previous government is still there, what we have done is to tell them to start the processes again,” he said.

This came to light when Member of Parliament (MP) for Lilongwe South, Peter Dimba, sought an update on the progress made to recover the money from defaulters.

His response also revealed that the Democratic Progressive Party-led government signed an agreement with MBL to service its loan monthly at a rate of K5 million, translating to 167 years.

“Having reviewed all, we found that it did not make any sense .We had to revisit the issue and it has been nullified by the court. We have to start afresh negotiating with a particular defaulter on how best this can be recovered,” he said.

Mlusu also indicated that so far, the company has settled K75 million.

According to the Finance Minister, lack of political will and political interference contributed to slow recovery of the funds.

The development pushed MP for Nkhotakota North East, Martha Lunji, to request from the Minister an update on the misappropriation of Covid-19 funds and issues surrounding National Oil Company of Malawi to avoid targeting individuals.

However, government Chief Whip, who is also Minister of Lands Kezzie Msukwa, said Mlusu was only responding to questions as directed by the order paper.

In 2015, the government sold part of the Bank’s shares, to give up 75 percent of its stake in MSB for K9.5 billion ($21.1 million) to FDH Holdings Ltd despite protest from the then opposition parties and some Civil Society Organisations.

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