World Bank to support Malawi microfinance institutions
The World Bank has expressed satisfaction with the work done by microfinance institutions in the country.The bank has since pledged to continue technical and financial support.
World Bank senior private sector development specialist Ephraim Chilima, made the commitment on Friday in Lilongwe at the Malawi Microfinance Network 12th annual general meeting (AGM).
“We have seen improvement in the mobile payment system, which has penetrated the rural areas. The numbers of people that are banked have increased tremendously since 2008. We are very satisfied with the performance,” said Chilima.
He said World Bank will continue to support microfinance institutions in infrastructure and information technology.
“We are working with microfinance institutions these through our Financial Sector Technical Assistance Project. We are supporting them in capacity building, financial literacy, improving the payment system and also continuing to support the mobile payment system. We are also working with government on regulatory framework and also procedural framework. More importantly, we are working on the establishment of microfinance institutions hub to create a good link between the microfinance institutions and national payment system structure,” said Chilima.
MAMN chairperson Fumbani Nyangulu said the creation of the microfinance hub will reduce transaction costs.
“The creation of the technology platform in the country are a good development. Supporting infrastructure in terms of technology that all microfinance institutions can tap from reducetransaction costs. This trickles to the borrower by the end of the day. When the transaction costs go low the interest rate also goes low. We welcome the creation of this technology,” said Nyangulu.
MMN executive director Duncain Phulusa said the AGM will review performance rate for 2013 and also find solutions to challenges that the institutions are facing.
According to Nyangulu, the microfinance sector portfolio is below K10 million and last year they recorded repayment rate of 90 percent, which he said is a sign that their clients are able to repay the loans.
