Blantyre — Raised for a Purpose (RfP) Ministry has outlined an ambitious 20-year plan to establish a commercial bank with church members as is initial shareholding base.
Founder and Lead Pastor Aubrey Mwasinga announced Sunday in Blantyre during a service that was streamed to the church's branches countrywide.
He said, so far, consultations with regulator Reserve Bank of Malawi (RBM) have been successful.
"The idea behind is to pull money together from people that are like minded and are looking at long term benefits.
"The funds will be invested over a period in money markets and capital markets over a short and long period of time," Mwasinga said.
To raise the capital requirement for the future bank as stipulated in the RBM Act, Mwasinga said the church will first establish a SACCO named after the ministry.
"All of us and the ministry will be contributing towards the Sacco. One has to contribute a one off membership fee of K2000 to be part of the Sacco while shares will cost K1, 000.
"All the branches and members will use the already in place system to contribute.
"Once the required amount has been raised, we will upgrade the Sacco into another scheme," Mwasinga said.
Out of the Sacco establishment, the church must raise a capital base of K75 million.
He said membership based shares will be redeemable and that at the end of each year, dividends will be declared and disbursed.
"You are not at any risk of losing your money in any way," Mwasinga said.
In the medium term, he said, the church will register the Sacco as a non-deposit taking microfinance institution which will use the money said in the initial stage as capital.
"Everyone who will be part of the Sacco will automatically switch to shareholders in the microfinance as your money keeps increasing.
"We will then switch to deposit taking macro finance which has capital requirement of K 250 million which operates like a bank with some restrictions on it," Mwasinga said.
He said after raising enough capital, the microfinance institution will be upgraded into a fully-fledged bank with a capital requirement of about US$ 1.5 million (over K1 billion).
"We are investing into our future. We can do this in the shortest period but initially set it as a long-term investment," Mwasinga said.
According to Mwasinga, the Sacco will have church members as investors but the horizon will be broadened at microfinance stage to include outsiders.
Commenting on the development, RBM spokesperson Mbane Ngwira said church, just like any other institution, is eligible to open a bank anywhere so long as it follows guidelines as stipulated by RBM.
"In addition, the institution has to meet the RBM obligation," he said.