Malawi Savings Bank CEO says he received ‘political pressure’ to give loans

The Malawi Saving Bank (MSB) Chief Executive Officer Ian Bonongwe has made a scathing revelations which conclude that the wholly-owned state bank was being forced by the Democratic Progressive Party (DPP) administratiobn to release the loans now turned “toxic” to politically connected politicians.

CEO Ian Bonongwe - Toxic loans were obtained under political pressure

CEO Ian Bonongwe – Toxic loans were obtained under political pressure

Speaking during Times TV interview on Saturday June 20, 2015, Bonongwe admitted that he was being directed by the DPP regime which was led by late Bingu wa Mutharika to give loans to the politically connected businessmen in order to fund the importation of Farm Input Subsidy Program (FISP) which they had just been given by the government.

His comments lends credence to claims that business magnate Leston Mulli challenged President Peter Mutharika point blank during an audience at Kamuzu Palace that he cannot pay back billions he got from MSB because the money mostly went into late Bingu’s business stakes.

Sources revealed that the meeting took place in March as the President tried to understand the consequences of selling the bank.

“In fact Mulli wanted the President to know that most of the money he took from MSB was channelled to Bingu who also had stakes in most of Mulli’s businesses. He asked the President to help paying back the money, a thing that made Peter angry,” sources claimed.

Mutharika is said to have advised Ministry of Finance and Reserve Bank of Malawi officials on government adopting all the toxic loans of which K4 billion was for Mulli.

When pressed by Times TV host Brian Banda to comment on why Bonongwe being a professional man was giving such huge loans to politically connected people, the MSB boss said he had no option to scrutinize the applicants because “we call them directed loans where by the authorities could say give such, such the loan,.”.

Asked if he is ready to resign from his position as the bank’s CEO, Bonongwe said he cannot resign from his position while blaming government systems for the mess.

MSB has for many years been a government-wholly owned bank with many branches across the country and sometimes it has been offering services through post offices.

Government has put the bank up for sale with only one preferred bidder FDH Bank of Thomson Mpinganjira.

The move to sale the bank is said to recapitalise it to meet regulatory requirements in terms of capital in line with Basel II but critics have interpreted it as a bail-out package for politically linked businesses.

Under pressure from opposition, civil society and the media, President Mutharika ordered a suspension of the sale of MSB to allow more public debate on the issue.

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Tittle tattle
Guest
A first thing first, why is MSB in this wrangle with MBHL? We all know that even great economies have their local entrepreneurs borrow money from their banks and enjoy their governments’ full support provided they pay back. The thing is why Mulli failed to pay back the loan? Was it a long term plan for PP to have this company in situation where it is now? Bingu assisted Mulli because from his economic wide experience he knew what local companies can do to our country-I really miss the guy. The real problem came in when JB dared World Bank’s… Read more »
kenkkk
Guest

Dpp,mulli thieves. Risks are part of business, mulli took the risks and they should pay. No excuse whatsoever and no blaming others but Mulli themselves.

Be Honest
Guest
Interesting is it now that Mulli is pointing fingers at late BINGU and yet soon after Bingu’s death he went on TVM telling all Malawians that late Bingu had no shares what so ever in MBL. Does it mean this guy relies on politicians to trade his businesses or is he looking for a scape goat or was he trying to win JB’s heart? No wonder JB knew this fanatic and kick him out for she knew what he was up to. Or is it usual business at Nyasa Times to throw in Bingu so that your wish of not… Read more »
kholowa mkabudula
Guest
The problem is with us pipo,we give these politicians too much power that they feel they are untouchable. Be honest enough who can refuse such directive from african presidents? Bonongwe shouldn’t be even asked this nonsense as if you pipo don’t know about this,it would be you the same pipo who could even bit him for not obeying the president.This is the party that you chose,mukumva mtedza simunati. The poor becoming poorer and the stingy poor politicians becoming as rich as bill gates in only one year,the poor dying caz cant get even aspirin in gvt hospitals while the rich… Read more »
MTELEZI
Guest

AMALAWI KUYIWALA MSANGA, mUNGACHOTSE MBAVA M’BOMA NDIKULOWETSANSO MBAVA? SORRY I CRY FOR MY BELOVED COUNTRY MALAWI. KUVOTA KUYANG’ANA MTUNDU. FEDERATION MUST COME AND GIVE US INTERNAL PEACE ALOMWE ABELANE OKHAOKHA BASI.

The Patriot
Guest

Now that we know who authorized Mulli to rape MSB what we gonna do with it? Shame on the Mutharika and Mulli families, ndithudi kudzikonda mpaka kuononga Bank yathu tonse a Malawi kuti inu mulemele? Mulhako ukamva ukuti bwanji pamenepa???

James Phiri
Guest

Why sell off the bank and write off the loans. the Bingu estate and the Mulli Borthers both have assets that can cover the K4 billion. Bonongwe should be going to the courts demanding that the assets of those that owe the bank money be sold to repay the loans.
The parastatals should be freed from political interference – make them public companies with proper regulations and regulatory boards so that these companies can be run for the benefit of all Malawians.

mwahana
Guest

Our youths are failing to get jobs because moneys that could have been used creating jobs are being pocketed by few selfish politicians and their cohorts. To add salt to the wound they are being arrogant to the suffering populace!!!!!!!!!

This Is Malawi.
Guest

Can I have a directed loan please!

Manyetera
Guest

The cashgate party is back in office. Sad

Nyapapi
Guest

Bonongwe should be fired for lack of professionalism and arrested for aiding/participating in defrauding MSB through fake loans.

He cant cite political pressure, he is a professional banker and was expected to act as such. If he felt anything wrong in the way the loans were handled he should have resigned.

In summary he is one of the thieves!

wpDiscuz

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