CFTC lobbying for development bank

The Competition and Fair Trading Commission (CFTC) has said Malawi needs a development bank so that small and medium enterprises (SMEs) can have access to soft loans with reasonable interest rates.

The commission said Malawi’s economy is dominated by SMEs, which many times fail to access loans from commercial banks and other lending institutions because of exorbitant interest rates.

Executive Director, Charlotte Wezi-Malonda, said this recently when Malawi joined the world to commemorate World Consumer Rights Day.

“With the country’s economy hugely dominated by SMEs, as a commission, we ask government and other stakeholders to consider establishing a fully-fledged development bank so that it provides soft loans with low interest rates to these SMEs.

“It is worrisome to note that commercial banks and other money-lending institutions have very huge interest rates, which sideline SMEs,” Malonda said.

Malonda explained that availability of a well-established development bank will ensure that there is good competition when SMEs want to access loans from commercial banks.

“Mostly, some commercial banks and money lending institutions charge exploitative interest rates because they realise that there is nowhere the SMEs can go and access loans at reasonable interest rates.

“But if the country had such a bank, there could have been fair competition as this development bank would be offering loans to them at reasonable interest rates compared to the commercial banks,” she said.

Mzuzu City Council Deputy Mayor, Alexander Mwakikunga, who was guest of honour at the event, complained that consumers in the country continue to face exploitation from some service providers.

“Vulnerable consumers continue to face exploitation from some service providers, especially in financial services. So as a council, we find the theme of this year’s commemoration befitting as it tackles such exploitative tendencies,” he said.

Mwakikunga also urged consumers in the country to voice out their concerns to relevant bodies CFTC whenever they feel exploited by service providers