Small and medium enterprises in Malawi can breathe a sigh of relief in their search for capital injection as one of the leading commercial bankers, NBS Bank presents a new product specially designed for them and their growing daily needs.
The new facility, dubbed Zayela Business Loan, is a program in which NBS Bank will finance the working capital and investment needs of eligible small and medium enterprises (SMEs) in the country.
According to NBS Bank, the facility aims to increase access to capital at a lower interest rate for SMEs, thereby addressing the challenge of lack of access to capital at affordable rates by most of these companies.
Tamanda Longwe, head of marketing and customer experience at NBS Bank, said the bank introduced the product taking advantage of its wide reach, which also involves a large base of SMEs that could benefit from it.
âOur large presence across the country positions NBS Bank well to reach as many SME clients across the country. It will also enable the Bank to reach women, youth and businesses in various districts, âsaid Longwe.
Better yet, Zayela Business Loan is also aimed at clients of SMEs who do not use NBS Bank. Longwe said the facility provides these SMEs with an opportunity to engage with the Bank on how they can benefit from it as well.
“This facility is also directly aligned with the banks’ goal of transforming lives. We expect a significant improvement in the lives of all of our customers once they have access to this facility,” she said.
Zayela Business Loan targets SMEs, a sector that is mainly made up of informal businesses in Malawi.
But NBS Bank hopes that these SMEs will take advantage of the loan program and formalize their businesses so that they can access loans.
âMany SMEs in the informal sector have no incentive to formalize due to the high cost of doing business, lack of access to capital and the high cost of borrowing.
âSince this facility will increase access to capital and significantly reduce the cost of borrowing, it is an incentive for companies to formalize and benefit from this facility.
âThis in turn will increase economic activity and is a testament to the financial inclusion agenda pursued by the Bank,â Longwe said.
Zayela’s commercial loan facility adds to the Bank’s lending product portfolio aimed at increasing access to credit for clients to participate in the economy.
Taking its name from the popular terminology “Zanga Zayela” [things are well with me, in literal translation], the program allows beneficiaries to access KK 25 million.
The repayment period ranges from 36 months to 60 months at the interest rate of 9 percent per annum.
This project is implemented by the Government of Malawi with funding from the World Bank.