National Bank of Malawi Plc says there is notable growth in terms of membership of village banks that are opening accounts and seeking financing with the Bank disclosing that so far K10.7 billion has been disbursed to Kasupe customers.
Speaking during an interaction with the village banks through Kasupe Finance partnership on Thursday in Blantyre, the Bank’s Chief Executive Officer Mcfussy Kawawa said the Bank is making a significant contribution to the financial inclusion agenda by disbursing loans through village banks.
“You have a small household that can access finance through the village banks and engage in small-scale business within the community, therefore, contributing to the broader economic growth of the country,” said Kawawa.
The CEO however appealed to village banks to fulfil their promises and repay their loans saying this can encourage the bank to offer more loans at affordable prices.
“The default rate is about 20 percent which is not too far from what we anticipated from the very beginning so it is not coming in as a surprise, but we expect that the lessons we are learning and the engagements we are having with the village banks, the default rate should be going down and we don’t expect to stop carrying on with this partnership,” said Kawawa.
Chairperson of a Ndirande-based Chilumba Village Bank, Faless Chinyati said as a transporter Kasupe Finance has helped to grow her capital.
She encouraged other village bank leaders to take an effort to make sure the loans are repaid as per the agreement.
“Leaders should take themselves as collateral and make efforts to clear the loan, then deal with default members later,” said Chinyati,
NBM launched Kasupe Finance in 2021 to provide a bridge to groups that could not access formal banking facilities.