PROMOTION AND DEVELOPMENT OF SME’S IN MALAWI
African Guarantee Fund has signed a three million USD guarantee
agreement with FDH Bank Malawi. The partnership will unlock financing
and facilitate promotion, growth and development of Small and
Medium-sized Enterprises (SMEs) in Malawi.
This comes against a background of SMEs facing serious challenges to
access financing in order to expand and grow their businesses. Recent
studies have shown that SMEs employ as much as 1 million people in
Malawi, while at the same time their economic activities are the main
source of livelihood for 70% of the country’s population. However up to
75% of all SMEs do not have access to formal financing and 59% are
entirely excluded from the formal finance sector.
The partnership between AGF and FDH Bank is therefore a strategic
move to position the bank towards increasing its SME financing thus
escalating SME growth.
AGF Chief Executive Officer, Felix Bikpo hailed FDH Bank for being
the first financial institution in Malawi to have partnered with AGF. He
said, “We are certain that this partnership will empower SME growth and
increase job creation in the country. AGF is also very keen on the
agricultural sector. Through FDH Bank, we will increase financing of
SMEs in agribusiness which will greatly increase Malawi’s economic
growth.”
The Managing Director of FDH Bank, Eric Ouattara said “FDH Bank has a
solid track record of promoting SMEs in Malawi and with this
partnership we are going to increase the number of SMEs we finance and
also pay special focus to the women entrepreneurs, agri-businesses and
the youth, among others to facilitate their growth and in turn the
growth of our economy.”
On his part, Minister of Finance, Economic Planning and Development,
Goodall Gondwe acknowledged the SME sector as one of the key areas in
growing the economy, but noted that the environment is not conducive due
to high interest rates.
He said, “As a government we will do everything we can to join hands
with the banks and partners to make sure we succeed. We will take up on
the goodwill AGF has shown and make good use of it.”