Minister of Industry, Trade and Tourism Joseph Mwanamvekha has said regulatory framework should not create unnecessary barriers to the development of the Savings and Credit Cooperatives (Saccos) movement.
He said instead, Saccos should rather enhance capacity building for the required standards.
Speaking when he presided over the opening of a 7th Annual Sacco Regulatory Framework Roundtable Workshop at Sunbird Mount Soche in Blantyre on Monday, Mwanamvekha said regulation must be tailored so that Saccos can be grouped in categories based on size.
He said: “Regulation must nurture small Saccos until they are able to comply with standards in the spirit of financial inclusion. Otherwise it will be difficult to build Saccos in the rural areas where majority of our people are living.
“Saccos have contributed significantly to the growth of the economy. Saccos have helped in providing financial access to the members at a relatively lower price. Interest rates in commercial banks are quite high, but also the procedure to borrow from banks is quite hectic, Saccos. As a ministry we are ready to support the Saccos,” he said.
Africa Confederation of Cooperative Savings and Credit Associations (Accosca) chief executive officer George Umbado said the body is of the view that successful implementation of regulation should be supported through coordinated approach.
“Cooperatives play a vital role in enhancing financial inclusion and access. In Africa, Saccos have a role in reducing poverty and assisting in employment, but governance has remained a challenge.
“In the past seven years, we have been organising meetings to bring regulators together to discuss ways in which they can develop the sector with hopes that we can improve our Saccos for the better. It is pleasing to note that strides are being made,” he said.
On his part, Malawi Union of Savings and Credit Cooperatives (Muscco) chief executive officer, Sylvester Kadzola said Muscco expects that the Saccos regulatory body and the Reserve Bank of Malawi (RBM) will be open to learn from other countries as well as revisit their regulations particularly on small Saccos to improve the movement in the country. n