NBS Bank plc has secured a $5 million investment from EDFI Management Company through the European Union-funded Agriculture Financing Initiative (AgriFI) to boost agricultural financing in Malawi.
The investment, announced yesterday in a press statement, aims to position NBS Bank as the leading financial institution in agricultural lending, with a particular focus on tea and macadamia value chains.
The bank plans to identify and finance strong processors and exporters in these sectors while supporting smallholder farmers through improved access to financial resources.
NBS Bank Chief Executive Officer Kwanele Ngwenya says the funding will strengthen the bank’s capacity to support agricultural businesses and related smallholder farmers in Malawi.
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“This funding will enable us to enhance our support for strong agriculture sector businesses and related smallholders in Malawi, providing them with the necessary resources and financing to expand processing capacity and improve their productivity and livelihoods,” Ngwenya said.
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The investment comes through AgriFI’s African, Caribbean and Pacific (ACP) Regional Window, supported by the Organisation of African, Caribbean and Pacific States (OACPS) Secretariat.
The initiative aligns with Malawi’s efforts to diversify its agricultural sector and boost economic development through improved access to finance for medium, small, and micro agri-enterprises.
EDFI Management Company Chief Executive Officer Rodrigo Madrazo said the investment would have a significant impact on smallholder farmers by facilitating access to financing and resources that will help improve their productivity and livelihoods.
“Our investment in NBS Bank plc underscores our commitment to supporting smallholder farmers in Malawi. By focusing on key agricultural value chains, we aim to enhance productivity and livelihoods, and driving sustainable growth in the region,” he said.
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In a recent interview, Small and Medium Enterprises (SME) Chamber Executive Secretary James Chiutsi said access to finance remained a significant problem for the sector in 2024.
“The financial sector’s apparent reluctance to develop innovative SME financing solutions has particularly frustrated business owners. Traditional lending requirements often prove too stringent for smaller enterprises, leaving many unable to access necessary capital for growth and expansion.
“Forex scarcity has severely impacted our members’ ability to import raw materials and essential equipment,” Chiutsi said.
NBS Bank, which operates 26 branches and has over 2,100 agents across Malawi, has positioned itself to leverage its extensive network to reach agricultural businesses and smallholder farmers throughout the country.
The development marks a significant step in strengthening agricultural financing in Malawi, particularly for smallholder farmers who often face challenges accessing formal financial services.
The investment is expected to catalyse private sector participation in sustainable agriculture and agribusiness development while promoting the integration of smallholder farmers into formal value chains.
