The financial sector has undergone significant reforms aimed at liberating and modernizing it. The result as been an increase in the number of commercial banks from two to nine, while microfinance institutions have climbed to 15. Reforms have also resulted to market-based interest rates and unrestricted access to financing facilities for both local and foreign investors. Exporters are also allowed to operate foreign currency denominated accounts in authorised banks.
Investment opportunities
Sector Coverage: New or existing financial companies have the opportunity to provide financing to high growth potential sectors such as education, health care, mining and real estate . These sectors are yet to attract deserved financing. 100% of commercial banks and 90% of MFIs are currently supporting the agribusiness, transport and services sectors.
Regional Coverage: Branches and agencies for both commercial banks and Microfinance Institutions (MFIs) are exclusively located in major cities. There is an opportunity to expand to
rural areas where outreach is still very limited.
There are existing full product gaps for companies including leasing product and services, production and price insurances, and warehousing credit. Financial investors can also take advantage of the under-exploited provision of overdraft facilities and financing of new businesses.
New investments are required to expand services such as credit and money transfer services to households.
Another significant opportunity lies in Value Chain Finance. Investors can find in Value Chain Finance innovative ways to mitigate risk and structure new products, such as warehouse receipts systems and factoring.
Financing new investments: There are opportunities in the provision of start-up capital for new enterprises. Almost 33% of commercial banks and 40% of MFIs do not support new businesses, and are currently offering a very limited range of products.
For further information on
investing in the financial sector contact the Malawi Investment Promotion Agency (MIPA).
Key contact:
Noel G. Lihiku,
Planning and Research Manager
MIPA
Email: nlihiku@mipamw.org
