By Mayamiko Chimbali & Chikondi Chimala, MANA
Malawi Enterprise Development Fund (MEDF) has said it was on the right track after reinventing itself into a competitive modern financial institution.
In an exclusive interview with the Malawi News Agency (MANA), MEDF Chief Executive Officer (CEO) Mervis Mangulenje said after having some difficult years in the past, MEDF has improved its operational strategies.
MEDF CEO Mervis Mangulenje
“Since 2014, MEDF has got some legacy issues emanating from Malawi Rural Development Fund (MARDEF) and Youth Enterprise Development Fund (YEDEF) which were closed,” She said. “They closed MARDEF and YEDEF and transferred all assets and liabilities to MEDF which is a new company.”
She explained that for the past eight years, MEDF has been struggling with losses because of the legacy issues of its past, all of which changed into positive from the 2017/2018 financial year when they decided to restructure the business which faced closure.
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“MEDF improved its operational efficiencies in terms of performance quality, profitability, turnaround times for loan disbursements, enhanced procedures and process mapping, and improving its human capital development by continuously training and coaching staff.
“We had to re-engineer the business, we had to invest in training, we had to device new products and services, but we changed the process mapping for granting loans to ensure that we fit in the industry and comply with the regulatory requirements from the Central Bank.”
President Mutharika at the launch of MEDF Youth
and Women Loan programmes
“Currently the financial position has changed from financial year 2018/19 to current due to the changes that were implemented in the past 24 months.”
The CEO added that they are doing their best as an institution to promote entrepreneurship development in the country through their four mandates which includes assisting all Malawians to set up small businesses and providing financial assistance in the form of loan in urban and rural areas in Malawi.
Reserve Bank of Malawi
“We are providing financial assistance especially in rural areas, because we are working on financial Inclusion where we are bringing the unbankables to banks.”
MEDF is committed to developing the youth and women through its mandates and products like business loans, trade finance loans, youth loans, women loans and agriculture loans.
Malawian farmers are hardworking
On where MEDF is placed in the sector, Mangulenje said: “We come in to create a mechanism where we groom the youth.
“We are ensuring that programs that involve the youth have their own process mapping and there are strategies that we have put in place to ensure that they have the skills, competences and opportunities to engage themselves in small enterprises.
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“As MEDF, we are working with women, which are better performers when it comes to loan payment.”
She said that MEDF was determined to supporting government agenda through entrepreneurship development in the country in reducing the levels of unemployment through entrepreneurship.
“If we find someone is doing well, it means they have capacity to employ other people,” the CEO said.
Their biggest challenge was the legacy issue regarding MARDEF which greatly affected MEDF when it was being instituted since it inherited outstanding loans from MARDEF.
She said these loans are haunting MEDF up to now, saying “unfortunately, after doing some audits and validations of those loan accounts, there were a lot of frauds and ghost clients, so it’s difficult to go on the ground and collect those loans.”
Beneficiaries during the launch
Despite the challenges that MEDF faced, the strategy change helped MEDF to make great strides by recovering 97.8 percent of the agriculture loans, 100 percent of pay roll products and above 90 percent of business loans for the last season.
“We changed the process mapping, we changed the procedures, we installed new banking software and this helped us to make great improvement,” Mangulenje added.
Mangulenje insists new MEDF will function well
She urged the public to disregard the belief that MEDF is owned by government therefore it is free money, but rather they should keep in mind that MEDF is a revolving fund, hence they ought to continuously benefit others.
“People should understand that this was taxpayer’s money and we have to revolve this money to ensure that a lot of people are also benefiting.”
She said MEDF reports to three committees of parliament; PAC, Budget and Finance and the Social and Rural Development Committee and its vision was to have a deposit taking license, which would help them to have cheaper funds to result into reduction of interest rates.
An ambitious young man from Zomba, Samuel Losani said the re-energized MEDF offers an opportunity for self-uplifting that has been a challenge due to lack of finance and the knowledge to manage his business properly.
“MEDF will help me and others grow businesses by not only providing capital; but importantly giving us training on managing finances and proper investment which is a plus,” he said.
President Peter Mutharika launched the K13 billion MEDF Youth and Women Loan programmes on March 4 in Blantyre to cater for women and youth to access to loans.
“We can only achieve our vision if we empower youth and women to be drivers of change. No country can develop without youth and women participating in the economy,” Mutharika has said during the launch.
The President reiterated that the country has hardworking youth and women with no access to capital, hence government coming up with initiatives to provide the same.
“Most youths and women are very hard-working people. What we need is to give them capital for them to grow their businesses and create new wealth.
“There are many young people and women who graduate from community technical colleges in order to establish new businesses and industries. They have skills. But they need financing,” the President had said.
MEDF is a state-owned enterprise, which was established under the government’s Act in 2014.