TransUnion Malawi touts technology as key to unlocking financial inclusion, economic mobility in Malawi

TransUnion Malawi – a local financial firm – has described technology as a key component to unlocking financial inclusion and economic mobility in Malawi.

However, the firm’s Country Director Dumisani Kadango has rued challenges that a larger population of Malawians faces in accessing comprehensive financial services, lamenting that they are slowing progress to financial inclusion.

In an interview on Thursday, Kadango stressed that citizens are better empowered to save, invest, manage risk, and improve their quality of life when they have access to affordable, appropriate, and timely financial products and services.

“Financial inclusion has become one of the most critical building blocks for sustainable economic development, not only in Malawi, but across emerging markets. Yet in Malawi, a portion of the population still faces challenges in accessing comprehensive financial services,” he notes.

Kadango, while quoting a 2023 FinScope Consumer Survey, said 88 percent of Malawian adults are considered financially included, meaning they have access to and actively use formal or informal financial products and services, marking a major shift from 2014, when 51 percent of adults were financially excluded.

Notably, formal financial inclusion, which refers to the use of services provided by regulated financial institutions such as banks, microfinance providers, and mobile money operators, now stands at approximately 74 percent, up from 34 percent in 2014.

Kadango noted that the most rapid growth has been in the use of mobile money and other formal non-bank channels, which surged from 18 percent to 73 percent over the same period. While this progress is impressive, it conceals deeper issues.

“Only 13 percent of adults hold traditional bank accounts, down from 27 percent in 2014. This suggests that although mobile channels have expanded access significantly, reliance on full-service banking remains limited, raising concerns about savings, credit, and financial resilience,” he pondered.

“One of the biggest barriers to formal financial inclusion has been the lack of traditional credit information. Conventional lending relies on payslips, collateral, and credit histories, criteria many Malawians, especially informal workers and rural entrepreneurs, cannot meet. The rise of alternative data sources such as mobile money transaction logs, airtime purchases, utility payments, and other digital footprints offers a promising solution. These indicators allow lenders to better assess financial reliability and extend credit responsibly to underserved communities,” added the TransUnion Malawi chief.

But Kadango announced that there is good news because TransUnion Malawi has started supporting the shift by leveraging data-driven innovation to enable lenders to see beyond traditional credit histories.

Through responsible use of alternative data, scoring solutions, and deep consumer insights, Kadango his organization is working with partners across the financial ecosystem to help unlock access for those historically excluded, without compromising financial stability.

The approach is not merely about approving more loans; it is about responsible lending. When implemented correctly, data-driven credit scoring reduces risk for lenders while opening doors to economic opportunity for those previously excluded from the formal financial system.

“Mobile phones have become the gateway to financial inclusion in Malawi. Digital platforms are breaking down longstanding barriers and reshaping how individuals engage with financial services. For example, a young entrepreneur in Lilongwe can obtain a microloan through a mobile app, unlocking capital previously out of reach. In Dedza, a smallholder farmer can access weather-indexed crop insurance via SMS, providing protection against climate-related risks. Meanwhile, a student in Zomba can use digital savings platforms to manage finances, monitor spending, and build a financial footprint that supports future borrowing.

“These digital tools are more than convenient; they are transformative. Reliable, anytime-anywhere access to financial services through digital platforms reduces the physical, bureaucratic, and psychological barriers that have long excluded many from the formal financial system,” narrated Kadango.