Fastest growing local bank FDH Bank has partnered with Africa Guarantee Fund (AGF) in an agreement amounting to USD3 Million (MK2.2Billion) to finance Small and Medium sized-Enterprises (SMEs) in the country.
The partnership signing agreement took place in Lilongwe and will unlock financing and facilitate the promotion, growth and development of SMEs in Malawi.
"When SMEs grow, they create employment and pay taxes and in turn the economy also grows. The partnership has come against a background of SMEs facing serious challenges to access financing in order to expand and grow their businesses." FDH Bank Managing Director Eric Ouattara said at the ceremony
"Recent studies have shown that SMEs employ as many as 1 million people in Malawi, while at the same time their economic activities are the main source of livelihood for 70% of the country's population," Ouattara added
However, Ouattara noted that up to 75% of all SMEs do not have access to formal financing, and 59% are entirely excluded from the formal finance sector.
"The statistics make for grim reading, but at the same time they are also an indication of unrealized potential which can be exploited by all stakeholders as we aim to propel our economy forward. The partnership with AGF is therefore a strategic move for the bank to be in a position to increase its financing and funding of SMEs in the country and enhance their growth," said Ouattara.
"FDH Bank has a solid track record of promoting SMEs in Malawi and with this partnership we are going to increase the number of SMEs we finance and also pay special focus to the women entrepreneurs, agri-businesses and the youth to facilitate their growth and in turn the growth of our economy," he added.
AGF Chief Executive Officer, Felix Bikpo hailed FDH Bank for being the first institution in the country to partner with AGF.
"We are certain that this partnership will empower SME growth and increase job creation in the country. AGF is also very keen on the agricultural sector. Through FDH Bank, we will increase financing of SMEs in agribusiness which will greatly increase Malawi's economic growth," said Bikpo.
On his part, Minister of Finance, Economic Planning and Development Goodall Gondwe hailed the partnership, saying SMEs are key to boosting the country's economy.
"SMEs sector is one of the key areas in growing the economy, but the environment was not conducive because of high interest rates." Gondwe said
"We have dealt with that and now we want to eradicate power shortages which affect SMEs. We are establishing a bank soon to cater for SMEs and the agriculture sector. This is the time that Malawians should come together and pursue financial growth." He added
FDH Bank, is Malawi's fastest growing commercial bank with the largest service centre network of 52 service centres and a spread 93s ATMs across the country strategically positioned to service SMEs better in addition to its digital products portfolio.
The Bank has solid SMEs expertise and is also paying close attention to women, agri-enterprises and youth entrepreneurs.
AGF is a pan-African guarantee provider currently operating in 38 countries with more than 100 partner financial institutions. AGF's aim is to reduce the continent's SME funding gap through provision of partial credit guarantees and capacity development to financial institutions hence partnering with FDH Bank.