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OIBM, STANDARD BANK INCLUDED IN US CREDIT FUND (Malawi)

Posted by Gilmour Poincaree on December 13, 2008

12 December 2008 – 12:39:03

by Suzgo Khunga

PUBLISHED BY ‘THE DAILY TIMES’ (Malawi)

Opportunity International Bank of Malawi (OIBM) and Standard Bank signed agreements with the US embassy which allow the two financial institutions to participate in the Development Credit Authority (DCA) programme.

The agreements would enable United States Agency for International Development (Usaid) to enlarge its DCA programme and allow the two banks to lend up to US$13 million (K1.8 billion) to Small and Medium Enterprises (SME’s) in the agriculture and agriculturally linked sectors of the economy until 2014.

Speaking at the signing ceremony, US ambassador to Malawi Peter Bodde congratulated the two banks for targeting SME’s which he said are a critical sector for Malawi’s economic development.

“We all know the human impact these programmes have and how they can make a big difference in improving people’s lives,” Bodde said.

Under the DCA facility, the two banks would increase their SME client portfolio, especially in agricultural sector businesses located in rural areas.

Standard Bank and OIBM would work to provide loans to credit worthy farmers and small agri-businesses that have difficulties meeting normal bank loan conditions.

While commercial banks have often given preference to established urban businesses, the DCA facility is meant to increase lending to promising SME’s and lower their collateral requirements.

Deputy Chairman of OIBM Board of Directors Rodwell Mbale said the collaboration would stimulate productivity of smallholder farmers and allow them to invest in agro-processing industries.

Ministry of Finance Principal Budget Officer Bettie Ngoma who witnessed the signing of the agreements, noted that the initiative was a great way to stimulate microfinance lending by banks.

The US government’s DCA programme is already operational in 23 countries assisting thousands of enterprises to access required finance to achieve and maximise growth.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE DAILY TIMES’ (Malawi)

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