The Reserve Bank of Malawi (RBM) has been challenged to loosen some of their regulations that are hindering growth of various innovative skills by young people in the country.
The call has been made during Financial Technology (Fintech) Dialogue held in Lilongwe.
The Fintech Dialogue was aimed at leveraging digital financial services (DFS) to enhance the resilience of the Malawian economy, particularly in digitalization for an inclusive economy
In an interview with The Atlas Malawi, Dr. Sunduzwayo Madise, who was the guest of honor at Financial Technology (Fintech) Dialogue, urged RBM on the need to loosen some regulations which are said to be blocking youths innovators to thrive.
According to Madise, innovators are struggling to be licensed because the Central Bank has one licencing regime which needs one to pay K50million as capital to show one’s capability of paying that license.
“We need to encourage people to innovate, come up with the solutions that are practical and iam also asking the Central Bank to be a little loose interms of the regulations because if your too strict people can’t innovate people need to be allowed, they will make mistakes, but they need to be allowed to come up with innovations and it was interesting that we had Mhub which is a hub that has been there for such a long time and it has agreed that it can work with the Central Bank to be a regulatory soundbox where people can come and try their innovations and once they are satisfied they should go to the reserve bank maybe for licencing”
“But one also thing I noticed is that the reserve bank currently has one licencing regime in which if you want to operate as a payment system you must pay a certain amount, atleast K50million as capital to show that you can pay that license, the problem with some of these startups are small, you have one or two individuals, they don’t have that money but they have the solution so I think it’s important that they change the licensing regime, have a license for those who want to go into the payment system as maybe the banks do but also allow aggregators and other so that they can also be able to innovate the same with the National switch, they set a 50,000 USD membership fee, most of these can’t afford it so let’s lower it” said Madise
Iris Kissiti Country Lead for United Nations Capital Development Fund (UNCDF) applauded the Fintech ecosystem program saying it is playing a huge role when it comes to promoting financial inclusion for marginalized groups such as the youth, rural communities, women, refugees as well as SME’s.
“So Fintech ecosystem really plays a huge role when it comes to financial inclusion especially for marginalized groups such as youth, rural communities, women, refugees as well as MSM’s. By growing the Fintech ecosystem you’ll find that you have these institutions the small Fintechs, a little smaller than the financial institutions like the Banks that are able to address specific needs faced by these marginalized groups.
“You also able to taste out different ways of doing things for example, what is the best way to serve, because the way one can serve could be different from smallholder farmer so Fintech is really able to build a solution to address the specific needs of the such groups” said Kissiti
SIMO Entertainment and Promotions on behalf of UN Capital Development Fund (UNCDF) organized the event in collaboration with the European union and the Organization of African, Caribbean, and Pacific States to implement the Digital Financial Services for Resilience (DFS4Res) program in Malawi.
