LILONGWE-(MaraviPost)—Minster of Industry, Trade and Tourism, who also spent some good years with the privatized Malawi Savings Bank (MSB) as Chief Executive Director, Joseph Mwanamveka, has taken a swipe at the country’s commercial banks for charging high interest lending rates.
Mwanamveka, speaking during a press conference aimed at updating the nation on the incoming Malawi Investment Forum said the high interest lending rates are impeding investment in Malawi.
“This is a very serious matter sometimes one can just borrow K1Million but because the system on how these banks calculate the their interest rates is also very archaic, to the effect that out of K1 million borrowed a customer can pay back almost K50 million,” said Mwanamveka
Mwanamveka gave example of a number of properties being sold on auction and advertised in newspapers by the banks.
“This is a clear indication that indeed banks are not helping Malawians, apart from en slaving and impoverishing them,” he said.
The country’s financial institution lending rates is pegged at 40% which most small scale business are finding it difficult to cope up with.
In an attempt to address the high interest lending rates, early this year Reserve Bank of Malawi (RBM) issued a warning statement to commercial banks to think of lowering down the rates but the presser was withdrawn due to lack of legal backing.
However, Mwanamveka said the government is not lying idle on the matter.
“We were failing to discipline these banks because we were lacking legal backing, for example in Kenya interests rates are below 14 percent because they are charged according to the law while in Malawi we can be challenged on that one, so that is why as government we are now reviewing financial Services act where the issues like high interest rates will be controlled,” said Mwanamveka.
The minister also disclosed that the incoming Malawi Investment Forum (MIF) which is slated for October 10-11 in the capital Lilongwe, under the theme “Smart Partnership for Private sector-led industrialization” has attracted over 600 delegates both local and international.
The ministry of trade in conjunction with The Malawi Investment and Trade Centre (MITC) is hosting MIF for the second time after successfully held the same event in 2015.
“We are hosting the second MIF while our banking rates aren’t conducive for investors to put their money on projects. Government is doing all it can to contain the situation. We will utilize the forum by taping practical skills how others countries are faring on the same.
“Apart from that, my ministry has already drafted Financial Service Bill which will empower the central bank to contain the high charges on banks’ lending rates”, assured Trade Minister Joseph Mwanamveka.
Mwanamveka hinted that MIF aims at marketing the country to outside the world despite numerous challenges the nation was facing saying its fruits will be seen in future.
The minister guaranteed the nation that government will sign Memorandum of Understanding (MOU) with investors that decide to bankroll in public projects in a bid to contain their commitments.
Countries participating in this year’s forum include Botswana, Canada, China, Finland, India, Ireland, Italy, Kenya, Luxembourg, Mozambique, Namibia, Nigeria, Norway, Sierra Leon, Singapore, South Africa, Spain, Tanzania, United Arab Emirates, United Kingdom (UK), USA, and Zimbabwe among others.
This year’s MIF comes barely three months after MITC hosted The Malawi-China business forum which managed to rope in 11 Chinese companies who have shown interest to invest in the country in various projects.
Malawi Investment and Trade Centre (MITC), a merger of the Malawi Investment Promotion Agency (MIPA) and Malawi Export Promotion Council (MEPC) was incorporated under the Companies Act and became operational on October 1st, 2011.
MITC is geared towards promoting production (investment promotion) and marketing (export promotion) of Malawi’s goods and services including participate in trade fairs, facilitate investment process for potential investors, industrial assessment, counseling of investors and exporters.