- Written by Steve Chilundu - The Nation
- Created on 04 December 2020
The Institute of Bankers (IoB) in Malawi has challenged authorities to develop policies that ensure that agriculture becomes financing-friendly for commercial banks.
IoB Malawi chairperson Zandile Shaba, who is also chief executive officer of MyBucks Banking Corporation Malawi, said this yesterday at the Bankers Agribusiness Conference organised jointly with the Confederation of Women in Business (Comfwb) regional conference for Common Market for Eastern and Southern Africa (Comesa) in Lilongwe.
Her call comes against a backdrop of figures from the Reserve Bank of Malawi (RBM) showing that as at June 2020, agriculture was second in terms of receiving credit while banks at 20.8 percent from wholesale and retail trade at 23.6 percent.
Shaba said it is critical for Malawian farmers to graduate from subsistence to commercial, calling for collaboration between banks, government and players in the agribusiness sector.
She said: “A key aspect of unlocking the potential of modern value chains to drive progress is de-risking investment in rural areas.
“Many financial institutions see rural investment as a risky venture to begin with, and women and youth are particularly disadvantaged.”
Shaba observed that a study conducted three years ago by FinMark Trust found that more than 70 percent of young farmers face obstacles to access finance.
On his part, Minister of Trade Sosten Gwengwe said his ministry is committed to improving the business environment through legal and policy framework.
He cited the African Continental Free Trade Area (AfCFTA) to be operational in January next year as a bigger market opportunity for Malawi and the rest of Africa.
“The AfCFTA provides a greater market opportunity for us, all we need is to do our homework rightly so that we are not left behind,” he said.
Minister of Agriculture Lobin Lowe said despite that there are no reliable markets, farmers continue producing; hence, it is government’s duty to address the challenges.
“As we are working with farmers on production to improve supply of farm produce on the market, for instance, through Affordable Inputs Programme, we also need to work on addressing market needs for farmers,” he said.
Comfwb secretary general Prudence Mavubi described the conference as an opportunity for women to network and share business ideas that would boost economies in the region.
Financial experts says banks regard agriculture as a risky sector, which faces numerous challenges, including weather shocks that affect intended outcomes.
Malawi’s economy is heavily dependent on agriculture, employing nearly 80 percent of the population. In 2019,the economy grew by 4.4 percent, a marked increase from 3.5 percent in 2018 supported by a rebound in agriculture sector.