Malawi: African Development Bank gives financial sector a boost with new tools to support local corporates, SMEs and domestic trade
|The aim of the engagement exercise was to sensitize industry leaders on how best the Bank can partner with the private sector in the country to increase access to finance and financial intermediation options|
LILONGWE, Malawi, June 2, 2022/ — Members of the African Development Bank Group’s (www.AfDB.org) Financial Sector Development Department (trade finance division) have concluded a successful visit to Malawi aimed at strengthening engagement with the private sector and leading financial institutions.
The team, led by the Bank’s Country Manager for Malawi, Macmillan Anyanwu, engaged with senior executives of several local financial institutions in Lilongwe and Blantyre to establish points of entry for the Bank to support Malawi’s financial sector. Bleming Nekati, Chief Trade Finance Office; Jonathan Banda, Investment Officer; and Samson Kasuka, Senior Trade Finance Officer, made up the rest of the delegation.
The team also conducted presentations with a selected group of private sector officials, to raise awareness of the Bank’s major non-sovereign instruments and to introduce its newly launched trade finance transaction guarantee instrument to the Malawian market. The guarantee is specifically designed to provide up to 100% cover for non-payment risk to regional and international banks, for trade transactions initiated by local banks in various African countries. Among the wide array of trade finance instruments that are eligible for cover, are confirmed letters of credit, trade loans, irrevocable reimbursement undertakings, avalized bills and promissory notes.
The aim of the engagement exercise was to sensitize industry leaders on how best the Bank can partner with the private sector in the country to increase access to finance and financial intermediation options. “Engagements like these – between the Bank and Malawi’s private and financial sectors – are critical in ensuring that the country is fully aware of all instruments available to it in an effort to strengthen the private sector as an engine of inclusive growth necessary to lift more of its people out of poverty. I look forward to the bank extending over $30 million worth of trade finance guarantees to a number of the country’s major financial players over the next few months,” Anyanwu said.
The Bank’s Director for Financial Sector Development, Stefan Nalletamby added: “We are excited to introduce an array of non-sovereign tools that Malawian private sector entities can access to grow their business. Instruments such as the transaction guarantee offer the Bank flexibility to use our strong AAA-rated risk-bearing capacity to increase access to trade finance and boost intra/extra-African trade in our regional member countries like Malawi.”