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Digital Financial Services making positive strides in Malawi

Written by  Mirriam Kaliza

Digital Financial services got introduced first in Malawi in 2012. Many people both consumers and investor’s had their fears to get involved, but as time went by, the country has been registering a staggering progress over the years.

Kabambe: There has been a tremendous change Kabambe: There has been a tremendous change

Among other things, Government has been putting measures to ensure that there is an improvement on the conduct of electronic money transactions in the country and In 2016, Parliament passed the Payment System Act which enables regulation of payments, clearance and settlements of transactions done in Malawi.

The Reserve Bank of Malawi Governor Dalitso Kabambe also attributes the boost in the backbone system which is housed at the Reserve Bank known as the Malawi Interbank Transfers and Settlement System (MITASS) as it is able to link up all commercial banks in the country, the Accountant General, Malawi Revenue Authority and micro finance institutions.

Kabambe said there has been a tremendous change in the way Malawians have embraced the services as the overall average volume of transaction in the payments stream is now pegged at a value of K104 Billion Malawi kwacha daily, a situation he described as encouraging.

“Through MITASS, MRA is able to monitor inflows into their account at the Reserve Bank in real time while civil servants are able to get their salaries into their bank accounts within the same day the accountant general’s office uploads a batch into the system, “ said Kabambe.

Kabambe further explains that Malawi is also a member of SADC integrated Regional Settlement System (SIRESS) which facilitates cross border payments.

“Currently, Malawi transactions on the SIRESS platform hovers around 1,200 monthly valued at K20 billion Malawi Kwacha, “explained Kabambe.

Meanwhile, with the level of transactions in the region, Malawi is ranked number 6 among the 14 SADC member states.

The United Nations Capital Development Fund (NCDF) is implementing the Mobile Money for poor Program (MM4P) in the country since 2012 along with other mobile money platforms such as Airtel Money in 2012.

Some of the moblie money platforms 
NCDF Program Specialist, Fletcher Chilumpha said, Mobile Money for the poor (MM4P) aims at empowering vulnerable people to be using digital finance services in different categories such as farming, fishing and agriculture and also to achieve financial inclusion.

He says these services have made a tremendous impact in making financial services accessible by previously excluded rural communities and enabled other innovations.

Chilumpha said, “We are pleased that we have been able to make a positive impact in people’s livelihoods because we are addressing a need.”

Managing Director for one of the telecommunications service Providers, Airtel Malawi, Charles Kamoto said their mobile money platform, Airtel Money, has proved to be making the needed change in people’s lives as their clientele keeps increasing with time. He further explained that they intend to deepen the accessibility of their services through increased number of agents.

“With Airtel money, we started with baby steps in 2012, but we have now grown and our customer base is the largest in the country as far as mobile money platforms are concerned,” boasted Kamoto.

An operator explains mobile money transactions 
A Lilongwe resident who adopted the use of digital financial platforms early, Christopher Mtambalika explained that he has never regretted using the platforms since they are reliable and safe.

“Mobile money services have shortened trips people in villages used to embark on to the bank to access their finances; people are now able to access their money easily. My plea goes to service providers to increase the number of agents in hard to reach areas for people to quickly access mobile money services,” he said.

Currently, 30% of Malawians are using Digital Financial Services, there are hopes for the figure to hit 70 percent soon. Malawi was the first country to launch the Mobile money for the poor program and the approach has been replicated in 11 other countries.

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