More than 600,000 rural businesses targeted by a 42 billion kwacha fund in Malawi
By the AFREEQUE newsroom, based on The Maravi Post
Malawian company MAIIC (Malawi Agriculture and Industrial Investment Corporation) is implementing, with the International Fund for Agricultural Development, a rural financing facility worth 42 billion kwachas. Complemented by commercial banks, it is to mobilise at least 100 billion kwachas, with a rate capped at 15% a year, according to its managing director Taz Chaponda.
More than 600,000 businesses are expected to benefit from the Blended Rural Finance Facility (BRFF), a rural financing facility implemented by the Malawi Agriculture and Industrial Investment Corporation (MAIIC), according to The Maravi Post. The fund will provide 42 billion kwachas, which commercial banks' own resources are expected to complement in order to mobilise at least 100 billion kwachas for rural businesses.
The BRFF is supported by the International Fund for Agricultural Development (IFAD). Together with the eThrive project run with the World Bank, it is one of two major initiatives aimed at giving businesses access to credit in foreign currency. MAIIC Managing Director Taz Chaponda says businesses will be able to obtain funds in local currency and in foreign currency through commercial banks and microfinance institutions.
For commercial banks, MAIIC is aiming for a maximum annual rate of 15%, well below the market rate, according to Taz Chaponda. For microfinance institutions, the rate will be 4% a month. The programme targets those involved in production and supply chains: farmers, collectors and processing companies.
Agricultural economist Gresham Kamnyamata believes the scheme will improve agricultural productivity, by supporting crops and livestock, and will increase farmers' incomes. Over the past six years, MAIIC has worked with more than 100 companies financed through loans or equity investments. It has also extended credit to financial institutions so that they can offer low-cost loans.
This announcement adds to other agricultural financing in Malawi, such as the 5 billion kwacha fund for projects in Kasungu, announced on 1 October.
