LILONGWE-(MaraviPost)-Economic experts have chided local commercial banks for sidelining Small and Medium Enterprises (SMEs) in financial inclusion by focusing much on treasury bills for maximum profits.
Banks have been therefore urged to invest much in SMEs for private sector economic growth.
This appeal comes as local commercial banks are currently financing government projects through loans (treasury bills) amid dwindling of SMEs operations due to insufficient of financial support.
National Planning Commission (NPC) Director General Dr. Thomas Munthali told Unicaf University’s public lecture on Thursday, April 13, 2023 in the capital Lilongwe that its high time local commercial banks start investing in SMEs for Malawi’s sustainable economic growth.
Dr. Munthali observes that treasury bill investment is not sustainable for any country private sector growth.
“Treasury bills business is not sustainable though banks are making huge profits out of it, One time government will stop borrowing from bank. What will happen to these banks?
“Commercial banks must think outside the box by investing in SMEs for meaningful private sector growth that drives any country’s economic growth. Build capacity on SMEs for proper finances usage than always burdening them tough conditions when accessing loans,” dares Munthali.
Echoing on the same as guest speaker Mizinga Melu, Bankers Association of Zambia (BAZ) Chairperson observes that treasury bills have never be a solution to commercial banks growth but rather SMEs regionally.
Melu appealed to local banks to embed collateral into value-chained products SMEs produces while empowering them with business management skills.
“For Malawi economy to growth, commercial banks must embrace SMEs with serious investments. SMEs must also venture into partnership in business operations while assess potential markets where there is raping population growth.
“SMEs must show ability to pay loans, ability to comply with tax authority and insuring their businesses for safety. This builds trust in commercial banks to releases resources for SMEs growth,” educates Melu.
In his response during event’s panel discussions NBS bank Chief Executive Officer Kwenele Ngwenya welcomed the idea of embracing SMEs fully.
Ngwenya said his bank has also other avenues SMEs can tap resources without tough conditions.
Therefore Minister of Trade and Industry Simplex Chithyola lauded Unicaf University for timely lecture on SMEs welfare which is in line with Malawi 2063 agenda.
Chithyola appealed to entrepreneurs to embrace the ministry’s SMEs directorate for their business growth.
Unicaf University Vice Chancellor Dr. Robert Ridley expressed satisfied with public lecture that aimed at private sector financing of SMEs.
“The idea for this event arose from the National Development Meeting hosted by the National Planning Commission in February of this year. There was a major topic on financing industrial development and within that session the issue of private sector financing of SME’s was raised, but was not covered in depth.
“We were delighted at the enthusiastic response we received the banking sector on this idea. The academic literature on innovation leading to entrepreneurship and business development speaks of the value of having a ‘Triple Helix’ approach, involving Government, the Private Sector and Academia, he explained.
Added Dr. Ridley, “As part of its Mission, Unicaf University seeks to “contribute to academic research and professional practice which serves the interests of the local communities in the countries in which we are present and the wider global environmental agenda. We hope this event, and similar events in the future may encourage a research and analytical interface between academia, government and the business sector on this and related topics.
“As such we promote public lectures and seek to actively participate in supporting national development. Based on the discussion on SME financing at the National Development Conference, and together with the National planning Commission we felt it would be a good idea to go beyond the usual university public lecture and to use the opportunity to hold a broader discussion on issues that are of immediate interest for Malawi 2063”.
Under the theme, “Accessing private financing for Micro, Small and Medium Enterprises (MSME): Its role in enhancing economic growth towards Malawi 2063”, the public lecture attracted economic experts, entrepreneurs, government officials, media and commercial banks.
