Opposition leaders accuse MRA, banks of killing SMEs
Main opposition Malawi Congress Party (MCP) and other parties yesterday accused commercial banks and the Malawi Revenue Authority (MRA) of killing Small and Medium Enterprises (SMEs) in the country. SMEs, said to be the engine of economic growth in most countries, including the most developed, are failing to grow in Malawi because they find it difficult to access finances since banks are risk averse.
The parties, which included Alliance for Democracy, Mafunde, New Labour Party (NLP), National Rainbow Coalition, Peoples Progressive Movement, United Transformation Party and United Independence Party (UIP), say, in a signed statement, that banks and MRA are exploiting SMEs
The 20-page document also questions the role of the government in protecting and promoting SMEs.
During a press conference, which the parties held in Blantyre, they complained about high interest rates by the banks, which are also confiscating borrowers’ property and selling it to foreigners once they default on loans and other facilities.
NLP president, Sam Mpasu, a former Cabinet minister in the United Democratic Front administration, said predatory practices of the banks have rendered SMEs destitute, while the government feigns ignorance.
Mpasu said SMEs help to drive the economy; hence, it is the responsibility of the Minister of Finance, Economic Planning and Development, Goodall Gondwe, to ensure that every sector of the economy is well-served by the financial services sector.
“We have indicated several examples of how some disgruntled customers have taken their banks to courts because of exorbitant charges that should not be there. These are some of the things that the Bankers Association of Malawi (Bam) should look into.
“Malawians are los ing property and many others are afraid of getting loans from banks, and that is not a conducive environment for the growth of the economy,” Mpasu said.
Bam spokesperson, Paul Guta, declined to comment when contacted, saying he needed to see the document first.
“It will be premature for me to respond now because I have not yet received the document,” Guta said.
The parties also criticised the MRA because it is used as an instrument for harassing SMEs, especially when owners are perceived to be the government’s critics.
The parties also accused MRA of favouring big businesses that are owned by foreigners, who import goods duty-free because they financially support the ruling party.
In the document, titled ‘Toxic Financial Services for Malawi SMEs’, the opposition parties also recommend that there should be a body that should investigate the unethical conduct of MRA.
The parties also said there was need for the government to set its banking policy for the social and economic development of the country.
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