Malawi Union of Savings and Credit Cooperatives (Muscco) is this year upbeat about robust performance on the back of policies and positive developments in the financial services sector.
Muscco chief executive officer Sylvester Kadzola said this in light of the latest Reserve Bank of Malawi (RBM) Financial Institutions Supervision Annual Report which has indicated that the sector has performed well in terms of assets, savings and profits.
Kadzola said the environment is conducive for the growth of the financial services sector and that policies have been developed to improve the performance.
He said: “Mid this year, Reserve Bank of Malawi gave the institution [Muscco] licences to operate a general and life insurance company which is currently in operation and a forex bureau which will open soon. This will surely boost the performance this year.
“We are also currently in talks with telecommunication service providers and Canadian Cooperatives Association to bring new technologies in the running of the Saccos [Savings and Credit Cooperatives] and uplift lives of those in rural areas.”
Kadzola, however, said the current economic environment will make it difficult for the cooperatives sectors to achieve intended results.
According to the RBM report, total assets for the financial services sector grew by 14 percent to K4.9 billion in 2014 from K4.3 billion the year before.
In addition, the financial cooperatives sector performance improved as profits increased from K200.7 million in 2013 to K261.1 million in 2014.
There was a 13.5 percent increase in total savings to K4.2 billion in 2014 from K3.7 billion the previous year, the report said.
The report also said aggregate total capital for the sector increased by 405.3 percent from negative K83.4 million in 2013 to K254.6 million in 2014 despite the continued deterioration of the financial status of some financial cooperatives.
Despite this performance, membership of the financial cooperatives sector declined by 11.5 percent from 98 871 in 2013 to 87 455 in 2014.
Reacting to this, Kadzola said the decline was largely due to withdrawal of members from Saccos, blaming it on government’s failure to settle remittances for civil servants.
“Non remittance of payroll deductions by various government arms has affected the performance and participation of most Saccos, forcing members to withdraw from the Saccos,” he said.
Kadzola, however, said Muscco has been in discussion with government and received an assurance that the problem will be addressed.