By Deogratias Mmana:
About a million micro, small and medium enterprises (MSMEs) will get exposed to financial literacy and entrepreneurial skills through a programme being implemented by the Reserve Bank of Malawi (RBM) and German Savings Banks Foundation for International Cooperation (DSIK).
RBM Governor Wilson Banda said on Friday that a memorandum of understanding (MoU) the central bank signed with DSIK will help address barriers MSMEs face in accessing finance from formal financial service providers to expand their businesses.
According to a 2019 FinScope Malawi MSME Survey, there are 1.1 million MSME owners in Malawi, an improvement from 760,000 in 2014.
According to Banda, the 2019 survey found that only 54 percent of MSMEs had access to formal financial services and products.
“The MoU will help in supporting one of the priority areas under the National Strategy for Financial Inclusion 111, which seeks to promote the creation of a strong, vibrant, productive and market-oriented MSME sector capable of attracting various forms of financial services and investment,” Banda said.
He commended DSIK for supporting the central bank towards implementation of some financial literacy and financial inclusion initiatives even before the official signing of the agreement.
Banda said the agreement is an important step towards supporting the government’s agenda of achieving an inclusive wealth creation and self-reliant nation as stipulated in the Malawi 2063 vision.
The vision recognises that competitive MSMEs are an important tool for spurring economic development and wealth creation through, among other things, creation of jobs and mobilisation of domestic revenue.
DSIK Country Representative and Programme Manager Franziska Dost said the agreement is aimed at supporting activities of RBM for basic financial education, especially the launch of the National Financial Literacy Strategy and the coordination role of the bank.
“A lot of work has already been done in the last weeks, as time is pressing. We could assist with a review and content development of the National Financial Literacy Strategy. Our training material has been introduced and we are working on the Malawi specific content. And 15 additional trainers have been trained as micro business trainers and are now at RBM’s disposal,” Dost said.
She said Germany would like to see many SMEs become financially independent so that they can positively contribute to the country’s socio-economic development.