Africa-Press – Malawi. Interbank transfers through the Malawi Interbank Transfers and Settlement System (MITASS) dropped by 1.3 percent in volume and 48.8 percent in value during the first half of the year, a Reserve Bank of Malawi Financial Stability report has indicated.
According to the report, MITASS recorded a slowdown in usage during the period under review as the volume declined, albeit marginally by 1.3 percent to 3.9 million. The value of transactions declined by 48.8 percent to K31.2 trillion.
The report has attributed the drop in usage to the decrease in money market transactions during the first half of 2022 as a result of improvement in liquidity conditions in the banking sector.
It adds that consequently, on average, the value per transaction processed in the Real Time Gross Settlement (RTGS) component of MITASS dropped to K122.7 million from K296.2 million recorded in the previous period.
“Nevertheless, MITASS remains a systemically important payment infrastructure that is critical for effecting monetary policy initiatives in the country,” the report reads.
MITASS is the country’s core payment system and was introduced by the Reserve Bank of Malawi to harmonise payments and encourage the use of electronic payment.
Although the interbank transfers dropped, usage of digital financial services (DFS) by individuals, in terms of both the volume and value of transactions, increased during the period under review.
The report indicates that the volume of DFS rose by 4.0 percent to 460.7 million whereas the value of transactions increased by 8.0 percent to K8.2 trillion during the same period.
“This outturn reflects growing customer preference for digital channels when making payments as opposed to using cheques whose settlement is usually deferred.
“In addition, carrying huge sums of cash also poses risks to the consumers and therefore DFS offers a safe and convenient mode of payment especially for small and regular payments,” the report adds.
ICT Association of Malawi (Ictam) President Bram Fudzulani believes the growth of digital banking in the country is hampered by lack of knowledge and lack of trust by customers of banks.
“When we say we want to improve financial inclusion, let it cover things such as reduction of transaction costs, removal of taxes that go into buying of mobile gadgets and reduce the costs that banks pay to telecommunication companies for USSD services,” Fudzulani said.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk. He is however flexible as he also writes about current affairs and national issues.
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