Bank seeks to raise K750bn in 10 years

Malawi Agricultural and Industrial Investment Corporation (Maiic), a development finance institution under a public private partnership (PPP) arrangement, on Tuesday unveiled an ambitious plan to raise $1 billion (about K750 billion) capital in the next 10 years.

Maiic chief executive officer Taziona Chaponda outlined the institution’s target in Lilongwe during an event marking the official operationalisation of the entity, registered under the Companies Act of 2013 to spearhead private sector development.

Outlining how Maiic intends to raise capital, he said they plan to use avenues such as pension funds, private equity firms, regional and international development finance institutions and other international investors.

Said Chaponda: “Next year, we will focus on the local market and our target is to raise $80 million (about K59 billion) during the year with a local focus. In the next three years, our focus will then be broader as we want to raise about $200 million (about K148 billion). So, the $1 billion will be spread within a period of 10 years.”

He said unlike the banking credit, which is short-term, Maiic will be offering softer credit facilities with loan tenors longer than the short-term horizon.

“We are, therefore, geared to support commercially-viable investments in the public and private sectors of the economy to consolidate and promote growth, productivity, employment, wealth creation and broad-based economic development,” said Chaponda, a former senior economist at the International Monetary Fund (IMF).

Speaking at the event, Reserve Bank of Malawi Governor DalitsoKabambe described the institution as a timely and strategic intervention.

“What we have been missing is the presence of development finance institutions, which offer medium to long-term project loans.

“Maiic is, therefore, filling this gap and is complementing efforts such as the one done recently by the National Bank of Malawi in establishing the NBM SME Development Bank,” he said.

A feasibility study commissioned by the Malawi Government in 2013 found that there was a great need to establish a development financial institution in Malawi in view of the huge financing gaps, particularly in infrastructure and small and medium enterprises.