Reserve Bank Governor Dalitso Kabambe on Tuesday charged at commercial banks, accusing them of denying the private sector the much-needed loans despite mobilising more deposits.
Speaking at Standard Bank plc 50th Anniversary Customer Dinner in Lilongwe on Tuesday, the governor also asked banks to be customer-centric, reminding them that Malawians do not enjoy “lacklustre” banking experiences characterised by long queues, out-of-service automated teller machines (ATMs) as well as as high interest rates and bank charges, among others.
Currently, figures show that local commercial banks have combined deposits or savings of K1.1 trillion, out of which only K512.9 billion, representing 47 percent.
Said Kabambe: “This is very low and unacceptable. It simply means that banks are not doing intermediation. Surely, banks cannot simply concentrate on Treasury bills operations.”
Malawi has nine commercial banks with a combined asset value of K2 trillion, a significant jump from a total asset value of K531 billion and K1.3 in 2013 and 2017, respectively.
Kabambe also decried poor access to loans in Malawi estimated at a paltry 10 percent, compared to other countries which he said have high rates of as high as 80 percent.
“The proliferation of other forms of financial services such as the unregulated banki nkhonde, village banks and private placement signal shortfalls in the banking system,” he said.
Without specifically commenting on the Kabambe’s sentiments, Standard Bank plc chief executive officer William le Roux said the Malawi Stock Exchange (MSE)-listed bank has a wide range of services in personal and business banking and corporate and investment banking.
“These services have been founded on a value system of excellence and timeliness in reaction to market dynamics,” he said.
Figures from RBM also show that the country’s savings rate is still low at 2.9 percent of the country’s gross domestic product (GDP), estimated at around K4.7 trillion.
The country’s savings rate compares unfavourably with the Southern Africa Development Community (Sadc) average of 12 percent.
But last week, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) President Prince Kapondamgaga also complained that one of the obstacles for small-scale businesses is lack of access to finance.