Govt remits deductions to microfinance lenders


Two weeks after The Business Times published a story about government’s non-remittance of K1.9 billion it deducted from civil servants as deductions for repayment of loans to micro-finance institutions, Treasury is reported to have started paying back some of the money.

In a statement published on Monday, the Malawi Microfinance Network (MAMN) says it has received a “substantial amount of the money” from the government as part settlement of the arrears and has since advised its members to resume disbursement of loans to civil servants.

MAMN have since commended government for responding to its plea accordingly and expressed hope that the remaining amount will be paid soon.


MAMN said it was unfortunate that during the time lending to civil servants was suspended, innocent civil servants from whose salaries repayments were already deducted were made to suffer for government’s failure to remit the deductions.

“Similarly microfinance institutions were being put in difficult financial circumstances,” reads the statement from MAMN, in part.

The grouping in December 2015 suspended disbursement of loans to civil servants until government settling the outstanding remittances dating back to 2012/2013 and 2013/2014 fiscal year.


He said the development has affected the operations of its members in several ways, including increased asset liability, reduced liquidity on the institutions and inability to issue fresh loans.

However, the Ministry of Finance said there a difference in the amounts being claimed by microfinance institutions and those in the records at the Accountant General’s office.

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