Over 600,000 businesses to benefit as MAIIC rolls out K42bn rural finance facility

More than 600,000 businesses are expected to benefit from the Blended Rural Finance Facility (BRFF), a scheme run by the Malawi Agriculture and Industrial Investment Corporation (MAIIC) to widen access to capital and help enterprises grow in rural areas.

The facility is backed by the International Fund for Agricultural Development (IFAD) and sits alongside the World Bank-partnered eThrive Project.

Together, the two initiatives aim to give businesses access to credit in foreign currency.

MAIIC Managing Director Taz Chaponda said the corporation was working with development partners and financial institutions to make sure businesses can secure the money they need to expand.

“MAIIC plays a key role in the financial sector, not only by providing long-term loans to enterprises but also by influencing lending conditions to make financing more accessible to businesses,” he said.

The BRFF will provide K42 billion, which commercial banks’ own resources are expected to top up to mobilise at least K100 billion for rural businesses.

Chaponda set out the terms: “For commercial banks, we will look for a maximum of 15 percent interest annually, which is significantly lower than what the market currently offers. For MFIs (microfinance institutions), it will be 4 percent per month,” he said.

The facility targets production and supply-chain players, including farmers, aggregators and value-addition businesses, with the aim of building stronger agricultural value chains. Enterprises will be able to borrow in local and foreign currencies through commercial banks and MFIs, Chaponda said, helping businesses that struggle to get finance on commercial terms.

Agriculture economist Gresham Kamnyamata said the facility would boost farm productivity by supporting crop and livestock production, raising household output and lifting farmers’ incomes.

Over the past six years, MAIIC has worked with more than 100 enterprises that have obtained loans or equity. It has also extended credit to financial institutions so they can offer low-cost loans to businesses.