FDH Financial Holdings Limited Chairperson, Thom Mpinganjira, has implored commercial banks to treat financial inclusion as a “business opportunity other than a corporate social responsibility”.
The Malawian entrepreneur said this on the sidelines of the Institute of Bankers (IoB) fourth annual general meeting held under the theme ‘Financial Sector Synergies: A Catalyst for Financial Inclusion’ on Friday and Saturday in Mangochi District.
Earlier, he told representatives of financial institutions that they were missing an opportunity by leaving a significant segment of the population unbanked, a development attributed to weak financial base and long distance to the unbanked people’s abodes.
“The perception in the banking industry seems to be that financial inclusion is part of corporate social responsibility instead of a business opportunity. So, what I am saying is that banks should strengthen their financial base by reaching out to the unbanked population as we focus on the financial inclusion goal,” Mpinganjira said.
The development comes at a time Malawi Microfinance Network has said market players have been introducing innovations, among them digital banking, to reach out to the unbanked in their contribution to the financial inclusion drive.
However, results of the 2008 FinScope Malawi survey indicated that a lot needed to be done to “define key goals and objectives, required strategies, and necessary actions for achieving the core objective of financial inclusion”.
It bemoaned lack of financing opportunities for a significant part of the population, indicating that 80 percent of the adult population was not able to borrow from any source to finance their activities.
The study sought to identify possible barriers to financial inclusion and provide recommendations based on an analysis of Malawi’s microfinance sector from the side of both supply and demand.
The National Forum on Microfinance in Malawi has also proposed the development of a National Strategy and Action Plan for Financial Inclusion in the country.
The Government of Malawi, through the Ministry of Finance’s Financial Sector Development Strategy II, wants over 70 percent of Malawians to be accessing financial services by 2021 from the current 34 percent.
It commits to creating enabling policies, strategies, regulatory systems and infrastructure to complement efforts of financial sector players.
Mpinganjira said, with players in the industry exploring means of increasing their financial base, the unbanked population provided fertile ground for a robust financial sector.