By Kingsley Jassi:
Industry and Trade Minister Vitumbiko Mumba has called on commercial banks to abandon risk-averse lending practices and adopt risk-sharing approaches to unlock financing for Malawi’s underdeveloped banana industry.
Speaking at the inaugural Banana Conference held in Lilongwe on Friday, Mumba said inadequate greenfield project financing continued to fuel structural economic challenges, with banks’ excessive risk sensitivity hampering industrial development.
Mumba said over 500 truckloads of bananas enter Malawi weekly, highlighting the country’s failure to meet domestic demand despite having suitable growing conditions.
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“Banks must not leave all the risks to farmers.
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There must be a risk-sharing approach. At the same time, we appeal to development partners to assist in industrial development, much as we appreciate their support in social sectors,” Mumba said.
According to Standard Bank research, Malawi imports $10 million worth of bananas annually, exacerbating the country’s balance of payments deficit.
Despite banks showcasing financing opportunities at the event, industry players cited numerous challenges— including lack of structured markets, unavailability of tailor-made financing products and inadequate extension services—as some of the factors thwarting sector growth.
Agricultural Commercialization (Agcom) Project Institutional Development Specialist for proper value chain development to unlock available financing.
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Agcom has supported Christen Malaidza acknowledged their limited support to banana production, appealing 10 groups in banana production, representing 2.4 percent of total beneficiaries across all agricultural industries, in the process providing K1.4 billion in matching grants.
Lilongwe-based banana farmer Frank Washoni said climate change had complicated production, such that farmers now require heavy investment in irrigation systems.
He cited poor market structure and limited access to finance as major obstacles.
The conference brought together stakeholders as the government intensifies efforts to diversify the economy away from tobacco and reduce the import bill through import substitution strategies.
