National Bank of Malawi Plc said that the cost of credit on the local market remains high for the majority of the Malawians including the youth.
NBM Chief Executive Officer Mcfussy Kawawa was speaking in Lilongwe on the sidelines of an interface with young entrepreneurs
Kawawa said that although the cost of borrowing has been coming down in recent years, it remains on the higher side.
He said there was an action which NBM has taken to make the cost of borrowing cheaper.
“One measure that we have taken is that we have operationalized our long term financing arm the NBM Development Bank so that startup capital will be one of the types of finance that we will be providing and the cost, thereof will be slightly lower than that of facilities that will be available under commercial banking. That is our way of making sure that we can extend cheaper credit.”
“ But let me emphasize that we need to work towards making sure that the cost of doing business is low for banks to afford to pass those benefits through low lending rates.’’ Kawawa said
He said NBM is committed to supporting the youth of the country to realize their entrepreneurship dreams.
“We are also having programs to do with youth innovation activities where we are encouraging the youths to innovate and those that impress us would have some support and all this will go a long way in encouraging the youth to participate more in business activities.’’
He said through NBM Development Bank, the bank will be able to offer collateral free facilities by just looking at the idea and supporting it in different forms whether through direct capital injection or extending a long term loan at an interest slightly lower than commercial banks.
“However, we expect the entrepreneurs to be serious so that once things start moving, they will pay back as promised.” Kawawa said
One of the entrepreneurs, Allan Chidzanja hailed National Bank for organizing the interface which, he said enabled the youth to understand some of the facilities which the bank offers.
Chidzanja said that the interaction also helped the youth to meet each other and share ideas.