Advertisement
National

Saulos Chilima whips banks

Advertisement

Commercial banks in the country have been challenged to extend their loan portfolio by making their conditions attractive and affordable to ordinary Malawians, as a means of facilitating economic growth that is driven by investments.

Vice-President Saulos Chilima made the remarks on Friday when he opened the second Bankers Association of Malawi annual conference in Mangochi.

Chilima observed that the role played by banks in the economic development of the country is diluted because commercial banks are failing to increase the number of people that access their services.

Advertisement

“The government expects banks to do their part to further contribute to the growth of the economy by providing financial resources at reasonable costs. Banks should respond accordingly to policy gestures from the monetary authorities as failure to do so stifles the business sector, which is the engine of economic growth,” Chilima said.

Chilima observed that interest on some banking services, notably loans, are exorbitant and that few businesses can survive while faithfully repaying the loan.

He further said the banks have become so rigid that they fail to improve their service delivery to depositors and borrowers, adding that this has made the banking

Advertisement

sector unattractive to over 65 percent of the bankable population

Chilima also urged banks to extend their scope of interest to tourism, mining and agriculture sectors.

In his remarks, Reserve Bank of Malawi Governor, Dalitso Kabambe, said failure by the banking sector to make its services attractive is costing the sector billions of money in the form of investments.

He said, currently, about 65 percent of money [equivalent to about K300 billion] is not banked as people do not see the benefit of taking their money to the banks.

Kabambe then advised banks to be flexible when giving loans to people by, among other things, giving them enough grace period before they start servicing the loans so that they can become stable and sustain their businesses.

Bam President, Paul Guta, raised concerns that, currently, about 19 percent of loans that banks give are non-performing, and that most banks face challenges to get loan payments due to some regulations that need to be changed.

Facebook Notice for EU! You need to login to view and post FB Comments!
Advertisement
Tags
Show More
Advertisement

Related Articles

Back to top button
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker