Bank of the nation, National Bank of Malawi (NBM) Plc has urged Small and Medium Enterprises (SME’s) in the country to develop a positive perception towards bank loans which are affordable and easy to access.
Speaking during a breakfast interaction with SMEs in Blantyre on Thursday, NBM’s Head of Retail Banking Oswin Kasunda said most businesses have stagnated because its owners are afraid to access loans due to the perception that the interest rates are very high.
According to Kasunda, their interest pricing is slightly above two percent per month but people think it is a high rate because they are grossing it up per annum.
“If you compare with other microfinance institutions you will find that the interest rate is very high, probably 20 percent. So, our interest rates might be a bit high but we think that we are providing affordable pricing.
“Pricing is also a factor of a return that the customer is getting, we cannot charge a customer a higher price than what he can get in terms of return,” said Kasunda.
Small and Medium Enterprises Development Institute (SMEDI) Business Information and Advisory Officer, Compstone Soko, hailed NBM for the interaction session saying it will enhance partnerships between the private sector and the public sector in terms of helping SMEs access loans.
“We believe that through digital platforms SMEs can access the services as you are aware most of these financial institutions are located in the urban areas but yet we have more SMEs in rural areas, so with phones and the internet we believe these services can be easily accessed,” said Soko.
One of the SMEs, Brenda Chitanda of House of Men clothing shop said the interaction helped her to appreciate the tailor-made products NBM has in stock which has changed her negative perception of the bank loans.
“They have explained the kind of loan that SMEs can apply for and also the duration of repaying, but before this interaction we didn’t know how to go about it,” said Chitanda.