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World Bank hails business reforms

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Global financial institution, the World Bank, has described as a great step in economic development the introduction of the Collateral Registry and the online Malawi Business Registration System (MBRS) by the Department of the Registrar General.

The two items, which were officially launched by Vice-President Saulos Chilima in Lilongwe Thursday, are part of the ongoing reforms in the department.

According to World Bank Country Manager, Laura Kullenberg, the establishment of the Collateral Registry will increase the availability of credit to consumers and small businesses through a secured lending framework.

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She said as a development bank, the global body values the importance of entrepreneurship in economic development.

“It is for this reason that we also do surveys to help client countries understand the issues that are hindering business development and growth. One such survey that I believe most of us here are familiar with is the Doing Business produced annually,” said Kullenberg.

She said recent surveys have shown that compared to other countries, Malawi has not been doing well under the starting business indicator, something which has been slowing economic growth which is usually spurred by a robust private sector.

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She added that with the introduction of the Collateral Registry which, among others, allows loan seekers to use movable assets like livestock as collateral, small and business enterprises (SMEs) will have less hurdles in accessing loans from banks and other financial institutions.

Kullenberg further waxed lyrical about MBRS, saying the previous manual registration system had its own problems that resulted in such issues as large number of enterprises remaining unregistered or opting to obtain bogus permits.

“The new online and automated registration system will increase transparency and accountability, reduce corruption and seal revenue leakages through online payment,” she said.

On his part, Chilima, who is chairperson of the Public Service Reforms Commission, said the online business registration system has reduced the number of days it takes to register a company from 38 to five.

“These reforms will also ensure that the Malawi Revenue Authority join hands with the Department of the Registrar General in registering businesses for tax purposes.

“These reforms are, therefore, far-reaching and will go a long way in curbing tax evasion in the corporate world and enhance revenue collection for social development programmes,” said Chilima.

He said the reforms process should send a message to the private sector and foreign investors that Malawi is serious about reforming its business climate and that the country aims to be the best place to do business in Southern Africa.

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