Reserve Bank of Malawi institutionalizing responsible practices

Last September, Reserve Bank of Malawi (RBM) introduced a new Malawi Microfinance Bill requiring all microfinance institutions (MFIs) within the country to disclose their pricing including nominal rate of interest, commissions and fees.

According to a MFTransparency paper ‘Reserve Bank of Malawi on Pricing Disclosure’, the new pricing disclosure policy in the Bill is a very ambitious step for a nascent market.

The Malawian microfinance market is still in a relatively early stage of development. RBM has made a concerted effort to involve a range of different stakeholder groups in the process of developing this new policy.

RBM may face challenges in implementation due to resource and capacity constraints on the part of MFIs in terms of their ability to comply. Extensive technical assistance and training will be needed not only to ensure effective implementation of the new Microfinance Bill but also the sustainable growth of the industry in general.