The move aims to extend banking services to other sectors which have been lagging behind in terms of Banking and Economy.

It comes high on the heels after so many players in the two sectors have complained about the absence of the said financial institutions which they said have been affecting investment and export.

Speaking during interview this week, Minister of Finance, Economic Planning and Development Dr. Goodall Gondwe hinted that government is holding talks with the African Development Bank (AfDB) to fund the establishment of the two financial houses.

“We are courting AfDB on the same and we have been told to conduct a feasibility study, which of course might take time. But initially we need about K34 billion to open ACB,” he said.

Gondwe said government is also seeking financial help from the World Bank (WB) for the two projects.

He said government is in the process of organising farmers into cooperatives and that to date the central bank has concluded feasibility study on the viability of the proposed MDB and results were analysed and financial market experts duly consulted.

“Gondwe said the establishment of MDB has, however, dragged because of the legal paper work that has to be approved by Reserve Bank of Malawi (RBM),”he added.

Asked on how Government will manage the banks when it had just sold its majority shares in some of its banks namely Indebank and Malawi Savings Bank to National Bank and FDH Financial Holdings Limited respectively Gondwe said that government plans to have a 50 percent shareholding in both banks.

Malawi is one of the few countries in the SADC region that does not have a development bank.
However the move has earned kudos from Economics Association of Malawi (Ecama) which through its President Henry Kachaje said it has been long overdue.

“It's high time Malawi had an agricultural development bank to promote export-oriented organised agro firms as the cost of borrowing in most commercial banks is exorbitant, thereby restricting large and organised farmers, especially exporters to access finances,” said Kachaje.

South Africa has the Development Bank of Southern Africa (DBSA), Mozambique has Banco Nacionale de Investment (BNI) and in Zambia they have Development Bank of Zambia while Tanzania has TIB Development Bank.