By Kingsley Jassi:
After the Treasury, the country’s industry must watch out for individuals and households, whose loan uptake from the financial sector surged by K329 billion in 2025.
According to the recently released Annual Economic Report by the Treasury, this is much higher than the business sector’s K263 billion during the period.
It may be explained by the growing short term payday loans that are increasingly becoming convenient amid economic pressures exerted on most employees.
The households held a total debt stock of K1 trillion while commercial and industry had K780.4 billion at the close of the year.
– Advertisement –
Foreign currency denominated loans rose to K318 billion while mortgages increased to K106.3 billion in the year.
Total private sector credit grew by 44.7 percent to a stock position of K2.3 trillion in the year, and that compares to a lower growth of 29.4 percent in the preceding year.
However, central government and statutory bodies still held a firm position in credit dominance, increasing credit by K2.6 trillion to K8.7 trillion, higher than the K1.9 trillion recorded in 2024.
“This was supported by expansion in net claims on government from the commercial banks and monetary authority of K2.6 trillion, while claims on statutory bodies marginally declined by K1.8 billion in the year,” the report explains.
– Advertisement –
– Advertisement –
Nevertheless, attempts to reverse central government dominance in the financial sector appear to have started yielding results but many demand sustained efforts to save the private sector that gasps for financing.
Meanwhile, efforts have been renewed to accelerate private sector projects to boost industrial productivity.
According to Bankers Association of Malawi President Phillip Madinga, the banks met with the Reserve Bank of Malawi Governor a fortnight ago to continue with the efforts that were initiated by the central bank last year.
“What we asked the Reserve Bank is we want incentives, if a bank is lending in agriculture how can they relax certain regulations? The Governor assured us that they were working on something towards that direction,” Madinga said.