The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has written the government to consider reinstating loan moratoriums and associated initiatives that the Reserve Bank of Malawi (RBM) implemented last year as measures to cushion the private sector from shrinking due to Covid.
In an interview, MCCCI Chief Executive Officer Chancellor Kaferapanjira said things have gotten worse due to the advent of the second wave of Covid.
He said, in the current situation, commercial banks should stop increasing transaction charges as is the case.
“Businesses are really having a tough time, nobody is making business now; so, they are asking more from those who are not making money. Generally businesses are failing to grow because people’s buying power has been suppressed with them not getting increments in their workplaces and having other entitlements removed,” Kaferapanjira said.
He further indicated that the moratoriums were only observed for three months, after which the situation went back to normal.
In a response to a questionnaire, RBM spokesperson Onelie Nkuna said the initiatives were still being observed as agreed.
She said the moratoriums were not wholesale but were implemented on case-by-case determined by bank-specific credit risk management factors.
“As you are aware, a number of sectors were hard hit by the last wave of the Covid pandemic and some were just starting to recover as we were getting towards the close of the year, only to be affected by the second wave of the pandemic, which has proved to be very virulent and devastating, socially and economically.
In a separate interview, Treasury spokesperson Williams Banda indicated that such issues would be reflected in the mid-year budget statement.
This comes as Parliament is expected to meet from February 22, 2021 for the budget review meeting.
At the peak of the pandemic last year government and development partners agreed that economic growth would be subdued to around 2 percent from the 6 percent initial projection.
RBM indicated that there was an increase in credit risk in the market, reflected through loan moratoriums’ extension to borrowers at the time.
According to the central bank, a total of 1,900 customers benefitted from the moratoriums with a consolidated balance of K103 billion, constituting 15 percent of total gross credit of the industry.
Fees and charges on digital banking were also to reduce by 40 percent, in a bid to increase customer utilisation amid calls for social distancing.