BLANTYRE-(MaraviPost)-The European Investment Bank (EIB) and FDH Bank have signed their first loan agreement worth K 6 billion that will support private sector investment across Malawi.
Entrepreneurs and private business across the country will benefit from a new EUR 7 million (Approx. K6 billion) credit line managed by the leading local financial services provider and backed a EUR 3.5 million (Approx. K3 billion) loan from the long-term lending institution of the European Union.
In a joint statement released by the two institutions, the EUR 3.5 million European Investment Bank loan to support the FDH Bank credit line was formally signed at the Africa Investment Forum in Johannesburg by Ambroise Fayolle, European Investment Bank Vice President and Patricia Hamisi, Senior Manager Treasury and Trade Finance at FDH Bank.
“Ensuring access to finance by small business and agriculture are key for economic growth, job creation and sustainable development across Africa. The European Investment Bank is committed to supporting private sector investment in Malawi and pleased to agree our first joint lending programme with FDH Bank,” said Ambroise Fayolle, EIB Vice President.
He said early next year they will launch an innovative initiative to tackle barriers holding back agricultural investment in Malawi that has already been recognized as a model for high-impact private sector financing elsewhere in Africa.
FDH Bank acting managing director William Mpinganjira said EIB has a unique technical and financial experience of supporting private sector investment across Africa and worldwide.
“FDH Bank is pleased to partner with the EIB to strengthen financing for business and entrepreneurial investment across Malawi. The EUR 3.5 million EIB support for the new EUR 7 million credit line demonstrates a vote of confidence for FDH and Malawi.”
“We look forward to expanding our cooperation to benefit small holders, agriculture and agribusiness in rural districts across our country under a new scheme to be launched next year,” said Mpinganjira.
The statement said the new EUR 7 million credit line will support new private sector investment across a range of sectors and be provided through the FDH Branch network across Malawi.
The new Malawi credit line is part of a EUR 100 million private sector financing programme across Southern Africa supported by EIB.
Economic opportunities for thousands of small holders across Malawi are expected to be transformed under a new initiative to ensure dedicated support for long-term investment by agriculture companies in the country, according to the statement.
FDH Bank has been selected as the first bank in Malawi that will finance smallholder, agriculture and agribusiness investment under a new scheme that is currently being finalized and expected to be launched early next year.