Mobile Money and “Banki Mkhonde” Blamed for Decline in Bank Depositors

Business journalists in Mzuzu have observed that the growing popularity of mobile money services such as TNM Mpamba and Airtel Money, alongside informal savings schemes commonly known as “banki mkhonde,” is contributing to a decline in the number of Malawians keeping their money in commercial banks.

The concerns were raised during a media engagement organised by the Deposit Insurance Corporation (DIC) at Sunbird Mzuzu Hotel on Friday, where officials discussed the importance of formal banking and deposit protection.

DIC Manager of Operations Lowina Mwasigala revealed that the number of bank depositors has fallen from about 2.9 million when the corporation was established to around 2.7 million today. She described the decline as worrying, suggesting that many Malawians may be opting to store their money outside the formal banking system.

During the discussions, journalists pointed to the convenience of mobile money platforms, noting that services such as instant transfers and quick digital loans of up to K50,000 have made them increasingly attractive compared to commercial banks, where borrowing often involves lengthy procedures and documentation.

Others also highlighted the continued popularity of “banki mkhonde,” an informal community-based savings practice, as another reason some people choose not to deposit money in banks.

Despite these trends, Mwasigala urged Malawians to keep their savings in licensed banks, stressing that deposits are automatically protected under the Deposit Insurance Corporation framework.

“Our mandate is to promote financial stability and give depositors confidence that their money is safe. If a bank fails or closes, DIC reimburses eligible deposits,” she said.

MBC journalist Jackson Sichali described the engagement as an eye-opener, saying it equipped journalists with information to educate the public about the benefits of saving through formal financial institutions rather than keeping cash at home or relying solely on informal channels.

The Deposit Insurance Corporation was established under the Deposit Insurance Corporation Act of 2022 to protect depositors against the risk of losing eligible deposits in the event of a bank failure or closure, while strengthening confidence in Malawi’s banking sector.