By Duncan Mlanjira
Commercial banks in the country have been challenged to prioritise digital financial services if they are to remain relevant on the market.
The call was made by FDH Bank Acting Managing Director, William Mpinganjira during a Wealth Creation Forum held in Blantyre recently where he said mobile banking is becoming acceptable by consumers, hence, the need for banks to embrace it to the fullest.
“Reserve Bank of Malawi records show that three million people have bank accounts, although banks have been here for about 100 years now.
“Phones become popular in the early 2000s and right now Malawi has about six million mobile money subscribers. That tells it all,” Mpinganjira is quoted as saying on www.fdh.co.mw.
He also FDH Bank is doing all it could to embrace digital financial services, citing establishment of Airtel Kutchova and Ufulu Digital Account services among others.
He said services like mobile loans make the financial inclusion agenda attainable.
In a separate interview, UGI Insurance Company Chief Executive Officer, Bywell Chiwoni challenged entrepreneurs to focus on millennials, saying they pose a huge opportunity both as a market and workforce.
Chiwoni then challenged entrepreneurs to match their services with needs and aspirations of the youthful generation.
“They need to have access to whatever you are offering online while enjoying their time. So this is the way to go,” he said.
The forum was conducted under the theme Harnessing Malawi’s Digital Economy.
Last month, the Reserve Bank of Malawi (RBM) organised a conference at Sun ‘n’ Sand in Mangochi that attracted digital financial service stakeholders in a drive to consolidate the gains from the various innovations in the digital financial services space.
RBM urged the financial service stakeholders to shift from paper based payments instruments, such as cash and cheques to electronic based services, saying the transaction cost of using cash, whether by individuals or business entities, is far much higher than that associated with digital financial services.
RBM Governor Dalitso Kabambe said the high costs include time and money spent accessing a bank branch or an ATM to either deposit or withdraw money and the risk of loss coupled with un-traceability of the lost funds.
He also said the manual transaction carry cost of security arrangement for transportation, storage of cash and — from the national and RBM perspective — the printing and shipping charges which unfortunately have to be met using hard earned foreign reserves.
“Cheques have also their own challenges since banks, corporate institutions and even individuals have lost money to fraudsters,” Kabambe had said.
“Added to this, many people have complained of delays in receiving funds after a cheque is deposited. The challenges mentioned are non-existent in digital financial services.
“Therefore, why should one spend their time, energy and resources by using payment instruments that can easily make them lose money and potentially drive them out of business or dent their image?
“Why should one cling to a cheque which does not enable funds to be credited into their account instantaneously?
“Time has come for all of us to change the way we conduct our day-to-day payment transactions and digital is the way to go,” he had said.