Expanding Access to Financial Services in Malawi
This extensive report begins from the assertion that primary financial service needs are shared across income groups. It notes that these include accessing liquidity, having a safe place to store money, transferring money electronically to and from family members and creditors, and finding ways to decrease risk.
This report assesses the achievements and challenges for microfinance service delivery in Malawi, with particular attention to rural and agricultural markets. It identifies key elements that influence the development of Malawi’s financial system, and provides some recommendations and opportunities for investors, donors, government and private sector entities to support the development of an inclusive financial system.
Recommendations focus on getting key policies right, promoting innovation in financial markets, supporting the integration of fragmented markets along the agricultural value chain (Figure 1 on page 56 provides a useful flow chart of the agricultural value chain and possible financial products that may be useful at various stages along it), promoting transparency and accuracy in institutional performance reporting, and most critically providing financial and technical support to financial institutions that have the appropriate operating and governance structures to intermediate savings in rural areas, where the most challenging but greatest potential markets exist. This report also defines basic microfinance concepts and refers the reader to internet links and other resources to deepen their understanding of microfinance and relevant issues.
The reader is invited to use these resources as a basis to challenge and/or deepen some of the conclusions presented in this report and advance the dialogue on inclusive financial systems in Malawi.
The comprehensive examination in this report is based around the following key topics:
- An introduction to microfinance
- The broad policy environment
- Social and other sectoral policies
- The financial sector in Malawi
- Agricultural development and rural finance
- Demand for microfinance in Malawi
- The supply of microfinance in Malawi
- The legal and regulatory environment