By Glory Msowoya
Blantyre, Mana: Indigenous Business Association of Malawi (IBAM) has pleaded with government on the need to intervene and reduce exorbitant interest rates by commercial banks to support sustainability of local businesses in the country.
Speaking to Malawi News Agency (Mana) on how the business is recovering from Covid-19, President for IBAM, Mike Mlombwa said lack of access to finance is a major setback due to high bank interest rates.
Mlombwa said business owners in the country are looking for soft loans which can help them recover quickly from Covid-19 shock, which is contrary to commercial banks interest rates.
“If government can borrow money from the World Bank and put it on the ground and make sure that those people who have bankable projects and very sound business plans can have an access of borrowing the money, we can recover fully.
“For one to recover, there is need for soft loans which is difficult to obtain from our commercial banks; the interest rate is too high and as for National Economic Empowerment Fund (NEEF), only small and medium enterprises (SMEs) have access to finances depending on their initial capital.
“So, some business owners in the country need a lot of millions to recover fully from Covid-19 as such with high interest rates, it is very difficult,” Mlombwa said.
Mlombwa also urged government to fully utilize use the 60/40 law to allow local business owners to get 60 percent of business from government.
“Government is the biggest buyer, we hope that government will speed up the pace it has taken to make sure that local business owners under small, middle class level are getting business with government, in doing so, we will actually see business coming back to normal and those people who lost their jobs due to financial crisis will be re-employed,” he added.
Recently, President Lazarus Chakwera launched Malawi Covid-19 socio-economic recovery plan aimed at enhancing the capacity of Malawi and its citizens to effectively recover and build back better from the adverse impact of the Covid-19 pandemic and facilitate the country’s transition to effectively implement and achieve its development aspirations.