By Burnett Munthali
Reserve Bank of Malawi (RBM) Governor George Partridge has called on commercial banks to play a bigger role in financing productive economic activities as Malawi seeks to accelerate industrialisation and attract investment.
Partridge made the call during the 11th Annual Bankers Association of Malawi (BAM) Lake Conference in Mangochi, where he stressed the importance of economic confidence, stable policies and credible institutions in encouraging businesses and investors to commit capital.
He said the central bank would continue working to maintain monetary and financial stability while strengthening payment systems and regulatory frameworks designed to support investment, innovation and economic activity.
According to Partridge, businesses are more willing to invest when they have confidence that the economic and policy environment is stable and predictable.
He said the responsibility of the central bank extends beyond monetary policy to creating conditions in which businesses and investors can operate with confidence.
The call comes as Malawi continues to search for ways of expanding domestic production, creating employment and reducing dependence on imports.
BAM president Phillip Madinga said banks were already financing sectors considered critical to the country’s economic transformation, including agriculture, manufacturing, energy, mining and infrastructure.
However, he acknowledged that access to affordable and suitable financing remains one of the major obstacles facing businesses seeking to expand.
Madinga, who is also chief executive officer of Standard Bank plc, said a major challenge is the mismatch between the short-term nature of deposits held by banks and businesses’ demand for longer-term financing to support major investments.
He argued that the success of the banking industry should not be judged solely by the amount of money it lends but also by the economic impact generated through those loans.
According to Madinga, financing should translate into stronger businesses, increased employment and broader economic growth.
Economics Association of Malawi president Bertha Bangara-Chikadza also urged financial institutions to increase lending to industries with strong potential to contribute to Malawi’s economic development.
She said several potentially important industries remain outside the formal financial system and therefore struggle to secure the capital required to expand their operations.
Limited access to finance, she said, restricts their ability to increase production, generate foreign exchange and create employment.
The discussions highlight the central role of the financial sector in Malawi’s efforts to move from an economy heavily dependent on imports towards one driven increasingly by domestic production and value addition.
For industrialisation to succeed, however, businesses will require not only access to credit but also predictable economic policies, reliable infrastructure, sufficient foreign exchange and a regulatory environment that encourages long-term investment.
The RBM’s message to banks therefore places the financial sector at the centre of Malawi’s broader economic transformation agenda, while also challenging lenders to ensure that their capital reaches enterprises capable of generating jobs, production and sustainable economic growth.
