Mwanamvekha Commends EIB-Centenary Bank £7.5 Million SME Financing Deal
Minister of Finance, Economic Planning and Decentralisation Joseph Mathyola Mwanamvekha has commended the European Investment Bank (EIB) and Centenary Bank Malawi for their £7.5 million partnership aimed at supporting and empowering Small and Medium Enterprises (SMEs), particularly women and youth engaged in agriculture.
Mwanamvekha made the remarks on Tuesday in Lilongwe during the signing ceremony of the partnership agreement, which is aimed at promoting financial inclusion and expanding access to finance for agricultural businesses in Malawi.
He said the partnership demonstrates the confidence that development partners have in Malawi’s financial system and the government’s economic agenda.
Mwanamvekha urged Centenary Bank and other financial institutions to ensure that SMEs can access the financing without unnecessary bureaucratic procedures.
He said some SMEs struggle to access loans because they lack sufficient collateral and other requirements demanded by financial institutions, while high interest rates also remain a major challenge.
The Minister therefore called on the banks to offer competitive pricing so that the intended beneficiaries can meaningfully benefit from the financing.
«“Any economy to develop in the world depends on SMEs because there are many of them. When we empower SMEs, it means we are impacting a larger population of the country’s economy. So, empowering SMEs is empowering the economy because no country can stabilise its economy without SMEs,” said Mwanamvekha.»
Mwanamvekha further assured development partners, including the European Investment Bank, European Union, and ambassadors from Germany and Ireland, that government will continue creating an enabling environment for financial institutions to thrive and provide better services to their customers.
He said Malawi’s economy was beginning to show signs of stabilisation, citing declining interest rates and inflation, as well as improvements in foreign exchange reserves.
According to Mwanamvekha, the developments will create a better environment for banks and the private sector to expand their operations and contribute to economic growth.
Meanwhile, European Union Ambassador to Malawi Daniel Aristi said agriculture remains a critical component of Malawi’s economy, with about 72 percent of the population involved in the sector in one way or another.
He said increased financing and investment in agriculture was therefore essential for creating employment and improving livelihoods.
Aristi said the agreement specifically targets agricultural SMEs, with a strong focus on bringing women and young people into the programme.
He stressed that the investment should be sustainable and contribute to food security, job creation, employment and increased incomes for Malawians.
On his part, European Investment Bank Regional Hub for Southern Africa and the Indian Ocean representative Jim Hodges described the partnership as a bold initiative with genuine transformative potential.
Hodges said £7.5 million had been set aside to provide loans and micro-loans to farmers, with half of the financing expected to benefit women.
He said the initiative would support Malawi’s agriculture sector while also promoting the economic empowerment of women.
Centenary Bank Board Chairman Francis Pelekamoyo said the bank’s ambition was to reach between 1.5 million and 2 million people with financial services.
Pelekamoyo said the bank would place particular emphasis on rural communities, where many people still struggle to access formal banking services.
He said Centenary Bank would also intensify financial literacy and sensitisation programmes to help potential customers understand the requirements and processes involved in accessing loans.
