FDH Bank and the European Investment Bank (EIB) have signed their first loan agreement that will support private sector investment in Malawi.
Entrepreneurs and private businesses in the country will benefit from a new €7 million (about K6 billion) credit line managed by FDH Bank and backed by a €3.5 million euros (about K3 billion) loan from the long-term lending institution of the European Union
In a joint statement, the two institutions said €3.5 million euros EIB loan to support the FDH Bank credit line was formally signed at the Africa Investment Forum in Johannesburg, South Africa last week by EIB vice-president Ambroise Fayolle and FDH Bank senior manager treasury and trade finance Patricia Hamisi.
“Ensuring access to finance by small business and agriculture are key for economic growth, job creation and sustainable development across Africa.
“The European Investment Bank is committed to supporting private sector investment in Malawi and pleased to agree our first joint lending programme with FDH Bank,” Fayolle is quoted as having said.
He said early next year, they will launch an innovative initiative to tackle barriers holding back agricultural investment in Malawi that has already been recognised as a model for high-impact private sector financing elsewhere in Africa.
On his part, FDH Bank acting managing director William Mpinganjira said EIB has a unique technical and financial experience of supporting private sector investment.
“FDH Bank is pleased to partner with the EIB to strengthen financing for business and entrepreneurial investment across Malawi.
“The €3.5 million EIB support for the new €7 million credit line demonstrates a vote of confidence for FDH Bank and Malawi,” he said.
Mpinganjira said they look forward to expanding their cooperation to benefit small holders, agriculture and agribusiness in rural districts under a new scheme to be launched next year.
The statement said the new €7 million credit line will support new private sector investment across a range of sectors and will be provided through the FDH Bank branch network across Malawi.
The new Malawi credit line is part of a €100 million (about K82 billion) private sector financing programme across Southern Africa supported by EIB.
The statement said economic opportunities for thousands of smallholder farmers across Malawi are expected to be transformed under a new initiative to ensure dedicated support for long-term investment by agriculture companies in the country.
FDH Bank has been selected as the first commercial bank in Malawi that will finance smallholders, agriculture and agribusiness investment under a new scheme.