A local economic think-tank has asked the Reserve Bank of Malawi (RBM) and commercial banks to consider extending the three-month moratorium on interest and transaction fees offered to financially-distressed consumers.
The three-month moratorium announced in mid-April this year, ends this month.
In a statement yesterday, Centre for Financial Inclusion and Literacy Consultancy executive director Abel Mwenibanda said as Covid-19 cases continue to rise, businesses are being hit hard with continued business slowdown, affecting revenue generation.
He said in the event that the moratorium extension was possible, microfinance institutions should be prioritised as they serve small and medium enterprises (SMEs) and low-income earners.
He said: “Our recommendation comes on the basis that while RBM released K12 billion as additional liquidity to banks, nothing of this sort was done on the part of the microfinance sector.
“The sector is somewhat distressed, especially in terms of serving the existing clients and uptake of prospective customers.”
There was no fresh reaction from RBM but in an earlier response former RBM spokesperson Mbane Ngwira said the three months period was chosen not because it was estimated that the Covid-19 pandemic would end by that time.
He said the duration were arrived at to give room for assessment of the impact of the measures on the financial institutions, companies and individuals.
In mid-April, RBM responded to the Covid-19 pandemic by, among others, announcing measures to mitigate its impact, including moratorium on bank interests and transaction fees levied by Mobile Money Operators. (MNOs).
The implementing institutions included Bankers Association of Malawi, Malawi Microfinance Network and MNOs such as Airtel Malawi plc and TNM Mpamba who provided a three-month relife on interest and principal payment and transaction fees.
Institute of Bankers in Malawi chief executive officer Lyness Nkungula earlier encouraged customers that were in distress or will be distressed after the moratorium to approach the banks for restructuring of their loan facilities.
On its part, RBM reduced the Liquidity Reserve Requirement by 125 basis points to 3.75 percent, releasing K12 billion into the banking system and also cut the Lombard Rate to 0.2 percentage points above the policy rate.