The Reserve Bank of Malawi says over 65 percent (about K300 billion) of cash in the country remain unbanked, a development it describes as worrying and unhealthy for the country’s economy.
Reserve Bank governor Dr. Dalitso Kabambe disclosed this in an interview on the sidelines of an annual meeting for Bankers Association of Malawi held at Nkopola Lodge in Mangochi recently.
Kabambe said banks must ensure that the K300 billion is sourced and brought back into circulation so that it is used for different investments in the country.
“Banks must develop products, services and outreach programmes so that they can get the K300 billion because once this amount of money comes in the banking system, it will be available for businesses to borrow and invest in various areas for the development of the country,” Kabambe said.
Moreover, Kabambe said banks should offer very good interest rates on deposits so that they attract this huge money into the banking system which will in turn spur investment in the country.
Kabambe further observed that banks in the country were supporting wholesale and retail trading more than other key areas that would stimulate economic development.
“There is a mismatch where up to K450 billion is lent out to support wholesale and retail trading but I would like to challenge banks to consider supporting agribusiness, mining, tourism, and manufacturing,” he said.
In a separate interview, President for Bankers Association of Malawi Paul Guta said from the time the central bank announced its rates reduction policy, banks responded by reducing their rates on loans.
“As we speak now, other banks are already done even before the next policy statement is made,” Guta said.