Maravi

(DAILY MAIL) State to inject $49m into NSCB

State to inject $49m into NSCB
By NANCY MWAPE

GOVERNMENT is to inject US$ 4.9 million into National Savings and Credit Bank (NSCB) through the Rural Finance Programme (RFP) aimed at increasing sustainable financial services in rural areas. Finance and National Planning Minister, Ng’andu Magande launched the RFP this week to be financed by Government with a concessional loan of US$13.8 million from the International Fund for Agricultural Development (IFAD).

And NSCB managing director, Leonard Mwanza said management had developed an institutional development plan that outlined the number of branches to be opened this year. Mr Mwanza said 20 branches would be opened under the first phase of rural financing programme. He added that the bank’s aim was to have a presence in the 72 branches of the country.

The RFP has five components that include development of community based financial institutions with an allocation of US$2.3 million, US$4.9 million for promotion of rural banking services and a credit facility for contracted small scale production to be allocated US$ 4.5 million.

According to an appraisal report on the RFP, US$1.5 million would be allocated to innovation and outreach facility that would provide support to financial intermediaries to reduce the initial risk of offering services in rural areas and encourage innovative financial products.

Government has also allocated US$3.5 million for policy, institutional and management support that would be closely aligned with policy initiatives being developed under the Financial Sector Development Programme.

According to the RFP appraisal report, US$4.9 million for NSCB would support expansion of rural banking. The report adds that Government’s commitment to the recapitalisation would be in the form of a US$1.3 million debt or equity swap and US$1.2 million cash injection into the
bank.

IFAD’s contribution to the recapitalisation would constitute investment in the bank’s expansion of rural branches, procurement of a new computerised accounting system and professional support to improve management and operating procedures.

The report adds that the support would make it possible for NSCB to develop into a sound financial institution capable of servicing rural areas with savings, loans and money transfer products.

Labels: IFAD, MICRO-FINANCE, RURAL FINANCE PROGRAMME

posted by MrK @ 6:25 PM