Find Banking and Financial Services expertise in Malawi
Malawi has a small banking system, which has a low but increasing level of financial intermediation. The banking system is concentrated and largely privately owned. Banks licensed to provide financial services in Malawi include National Bank of Malawi, Stanbic Bank (a subsidiary of Standard Bank of South Africa), Fincom (part-owned by the South African Nedbank), First Merchant Bank, and Indebank (with a majority of foreign capital). Other institutions include Malawi Savings Bank, National Finance Company, and NBS Bank (New Building Society, privatised in 2003). The National Bank of Malawi is the largest bank and has full domestic ownership. Stanbic, a subsidiary of South Africa’s Standard Bank, and First Merchant Bank, the second and third largest banks are also privately owned. Malawi Savings Bank is the only majority government-owned bank. Additionally, non-bank financial institutions include ten local insurance companies, one foreign insurance company and one reinsurance company. The Opportunity International Bank of Malawi set up in 2005 a new model of technology-driven, low-cost rural service delivery. This included a bank-on-wheels which provides a full range of bank services in rural and semi-urban areas, and has found success as a provider of both credit and savings. In 2010 they also launched another new innovation, ‘Banki Manji’ (‘bank in your palms’), a cell phone banking service.
Regulation of Financial Services
The financial sector is regulated by the Reserve Bank of Malawi, the central bank. The Bank has full mandate to conduct monetary policy, whilst fiscal policy issues are the mandate of the Ministry of Finance. The World Economic Forum Global Competitiveness Report (2012-2013) rates Malawi 56th out of 144 countries in soundness of banks (with a value of 5.4 out of 7 compared to a world mean of 5.1), above neighbouring Tanzania, Zambia and Mozambique.
Development of Financial Services
In the World Bank’s Ease of Doing Business Index, Malawi ranked 126th in the world (out of 183 countries) for getting credit, above neighbouring Mozambique yet below Zambia. In relation to protecting investors it ranked 79th, putting it in an equivalent position to Zambia and Namibia. In the World Economic Forum’s Global Competitiveness Report (2012-13) Malawi placed 104th in the world (out of 142 countries) for its availability of financial services, with a value of 3.8 out of 7, below the world mean of 4.5. In relation to affordability of financial services it was similarly below the world mean of 4.2 out of 7, with a value of 3.9. It ranked in a stronger position in relation to financing through the local equity market, coming in 48th position and 2 above neighbouring Zambia. For ease of access to loans it ranked in 112th place, again below the world mean (2.3 out of 7 compared to 2.9).