By Kingsley Jassi:
Malawi Agriculture and Industrial Investment Corporation (Maiic) has said two projects being implemented with support from the International Fund for Agricultural Development (Ifad) and the World Bank are expected to ease the cost of borrowing for businesses.
Maiic Managing Director Taz Chaponda said the initiatives were aimed at improving access to affordable financing amid high lending rates on the market.
In an exclusive interview, Chaponda said Maiic plays a key role in the financial sector not only by providing long-term loans to enterprises but also by influencing lending conditions to make financing more accessible to businesses.
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He said, in partnership with the World Bank, Maiic was implementing the eThrive Project, which would provide businesses with access to credit in foreign currency.
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Under the Blended Rural Finance Facility (BRFF), supported by Ifad, Maiic is targeting more than 600,000 businesses through implementing partners.
The facility will provide K42 billion, which is expected to be complemented by commercial banks’ own resources to mobilise at least K100 billion in financing for rural businesses.
“For commercial banks, we will look for a maximum of 15 percent interest annually, which is significantly lower than what the market currently offers. For MFIs [microfinance Institutions], it will be 4 percent per month,” Chaponda said.
The project targets production and supply chain players with intent to ensure robust value chains in the agriculture sector, supporting farmers, aggregator, and value addition businesses, among others.
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These projects, according to Chaponda, will see enterprises accessing capital in local and foreign currencies through commercial banks and MFIs, spurring growth of businesses that typically struggle to access financing under the commercial terms.
Chaponda said, over the past six years, Maiic had worked with over 100 enterprises that have either accessed credit in the form of loans or equity while providing credit to financial players to provide low-cost loans to businesses.
“I am pleased to report that now we have recovered from that and we are projecting to be profitable at the end of the financial year,” Chaponda said.
