MALAWI – National Bank of Malawi (NBM), the country’s biggest commercial bank by assets and profitability, unveiled NBM Development Bank which seeks to offer long-term financing to businesses, reported The Nation.

NBM Chief Executive Officer who is also NBM Development Bank Chairperson, Macfussy Kawawa, while unveiling the development bank in Lilongwe said that the entity will help businesses achieve their long-term plans.

Kawawa said the bank seeks to assist the country’s small and medium enterprises (SMEs) and help them to grow into big corporations.

“This is the bank that many Malawians have been waiting for. Unlike commercial banks, this bank will focus on long-term borrowing,” Kawawa said.

“We have sufficient capacity to take up more projects that need financing. As a financial institution, apart from our own capital we also rely on external capital.

“Under the commercial bank licence, we have had approaches by external long-term financiers but we did not take that up because we couldn’t do that under commercial licencing,” he said.

The development bank will provide long-term financing for small and medium enterprises and other life-changing investments.

The bank is expected to be providing loans ranging from K15 million (US$20,680) to K150 million (US$0.21) and K200 million (US$0.28m) in exceptional circumstances, with a grace period of two years and interest rates from 15 to 18 percent.

In addition to offering loans, NBM Development Bank will enter into partnerships with private sector players to ensure success in their businesses.

Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe said the coming in of NBM Development Bank will help actualise the dreams of many businesses who could not pursue long-term projects because of the nature of financing that was available on the market.

“People with business ideas such as coffee growing, opening a lodge in the tourism industry will now have no excuse for not pursuing those dreams.

“In addition, the bank gives a grace period before one starts repaying the loan, which is commendable,” Kabambe said.

Minister of Finance, Economic Planning and Development Joseph Mwanamvekha, said NBM Development Bank had come at the right time when the economy had stabilised.

“What government wants is to start growing the economy. The economy can grow if more businesses start borrowing money to expand their enterprises and create jobs,” he said.

 “The setting up of this development bank will ultimately contribute to poverty reduction. We have never had such a private sector bank in the country, and as government, we are happy with this development,” said Mwanamvekha.