The Reserve Bank of Malawi (RBM) has posted that private sector credit grew by 17.1% year-on-year in June 2019, from 11.8% in March 2019 and 2.1% in June 2018.
“During the first two MPC Meetings for 2019, the economic outlook was broadly positive with inflation being projected to continue on its declining trend and agricultural output projected to improve following favourable weather conditions.” reads the July Monetary Policy Report, ““This stance will further support the recent policy easing whose liquidity effects are yet to fully transmit in the economy as well as preserve financial market stability.”
Despite registering growth, trade experts have faulted the loan distribution to economic sectors, which favours credit to the wholesale and retail sector than other productive sectors. On the other hand, various firms have faulted the lowered policy rate, attributing it to their losses. Chief financial officer Temwani Simwaka addressed shareholders at the bank’s annual general meeting in Lilongwe, stating that there was a drop on interest income year-on-year in spite of the balance sheet growth. “Our lending to customers went up year-on-year but because of the decline in terms of interest rates, our income levels went down” said Simwaka.