World gone digital, bridge the gap

Even before the outbreak of the coronavirus pandemic which has stalled businesses and restricted physical interaction in doing business, the world was literally already on the digital path.

What the coronavirus has done, though, is to enhance the digital or electronic commerce (e-commerce) culture. With aeroplanes grounded and wider travel restrictions in force, e-commerce filled the gap, somehow, as businesses could place orders and make payments online using digital platforms provided by commercial banks worldwide.

The crisis has increased uptake of ‘tele-working’ with more and more organisations adopting the ‘working-from-home’ concept and holding meetings online through Microsoft Teams, Zoom, Skype and even WhatsApp calls (both voice and video).

Malawi is yet to fully embrace e-commerce and a recent United Nations Conference on Trade and Development (Unctad) report makes sad reading. The report largely attributes the situation to limited information and communications technology (ICT) infrastructure.

In terms of telephone penetration, the Unctad report says Malawi’s mobile phone subscription stands at about 42 out of every 100 people, which is way below the Africa average of 74 percent.

From the report, one learns that only 14 people out of every 100 in Malawi have access or use the Internet. This means that Malawi is generally a “mobile-only connection” country. Even on social media platforms, connectivity is low as, according to ICT Association of Malawi there are 500 000 Facebook users in Malawi compared to two million in neighbouring Zambia.

But it is not all gloom for Malawi in terms of digital world as the financial services sector, telecommunications and several others have fully embraced technology and the innovations are doing wonders.

I feel that while we still have a long way to embrace ICT and e-commerce, mostly due to the high tariffs, the innovations in the financial and telecommunications sectors are worth celebrating.

The world will never be the same even when the coronavirus restrictions are lifted. The future is digital, I can say, for most industries, including banking, financial services and telecommunications.

Closer home, the banks have not remained behind. If anything, they have overcome the ICT infrastructure challenges to provide electronic and mobile banking solutions such as Mo626 from National Bank of Malawi plc, Eazy Mobile from NBS Bank plc, Standard Bank Malawi plc’s 247 Moments and FDH Bank’s range of mobile banking services.

In the case of “my bank”, Standard Bank, one is even able to make cash deposits at automated teller machines around the clock besides point of sale (PoS) devices Aramex shop-and-ship service, digital loans—where a customer can apply and get loans online with no paperwork involved—and virtual branches.

The home-grown FDH Bank, on the other hand, has not lagged behind on the technology path as it has, over the years, established itself as one of the leading digital banks in Malawi. FDH Bank has WhatsApp banking, pioneered cardless withdrawals from ATMs and the recent Ufulu Digital Account which one opens on their mobile phones and their phone number becomes the account number!

With the future being digital, the year 2020—with or without Covid-19— Malawians have had “once-in-a-lifetime” opportunities to invest in companies with ICT impetus. In February, about 7 000 Malawians owned a part of Airtel Malawi plc through an oversubscribed initial public offer (IPO) ahead of the multinational company’s listing of 20 percent of its stake on the Malawi Stock Exchange (MSE).

This week, Airtel Malawi plc reported K15.9 billion profit for the year ended December 31 2019, a 588 percent jump from the K2.8 billion profit in 2018.

FDH Bank, a subsidiary of FDH Financial Holdings Limited, is the next IPO and potential listing on the MSE calendar this year.

During the Airtel Malawi IPO, the social media was awash with negativity that the telecommunications giant was not worth investing a penny in. However, those who took the risk and consulted their investment advisers are smiling now with the financial results that promise to get even better.

I would say the same for FDH Bank. Much as businesses and individuals alike are financially stressed due to the negative impact of the coronavirus, I would say the bank provides yet another attractive investment opportunity.

Perhaps owing to its purchase of the then wholly government-owned Malawi Savings Bank, today FDH Bank boasts the biggest network of branches at 91 in 27 of the country’s 28 districts. The bank is yet to extend to Likoma Island. In 2019, the bank posted K7.846 billion profit from K5.965 billion in 2018, representing 32 growth rate.

Besides banking and telecommunications, the digital platforms are also thriving with more and more consumers seeking entertainment, shopping opportunities and alternative means of connecting with their loved ones and business associates during the crisis.

Microsoft recently reported that the number of people using its software for online collaboration climbed nearly 40 percent within a week. The future is really digital, Malawi just needs to up the game, knock down the tariffs and bridge the gap.