Small and medium businesses in Malawi can heave a sigh of relief in their search for capital injection as NBS Bank is introducing a new product specifically for them.
The new facility, dubbed Zayela Business Loan, is a scheme where NBS Bank will be financing working capital and investment requirements for qualifying Small and Medium Enterprises (SMEs) in the country.
According to NBS Bank, the facility aims at increasing access to capital at a lower interest rate to SMEs thereby addressing the challenge of lack of access to capital at affordable rates by most such businesses.
NBS Bank Head of Marketing and Customer Experience, Tamanda Longwe, said the Bank has introduced the product taking advantage of its wide reach, which also entails a large SMEs base that could benefit from it.
“Our wide presence across the country positions NBS Bank well to reach out to as many SME customers across the country. This will also enable the Bank to reach out to women, youth and businesses in various districts,” Longwe said.
Even better, Zayela Business Loan also caters for SME customers who are not banking with NBS Bank. Longwe said the facility offers such SMEs an opportunity to engage with the Bank on how they too can benefit.
“This facility also directly speaks to the banks purpose of transforming lives. We do expect significant improvement in all our customers lives once they access this facility,” she said.
Zayela Business Loan is targeting SMEs, a sector which is predominantly informal businesses in Malawi. But NBS Bank hopes that such SMEs will take advantage of the loan scheme and formalise their businesses so that they can access the loans.
“Many SMEs in the informal sector do not have incentives to formalise because of the high cost of doing business, lack of access to capital and high cost of borrowing. Since this facility will increase access to capital and significantly reduce the cost of borrowing, it is an incentive for businesses to formalize and benefit from this facility. This will in turn increase economic activity and speaks to the financial inclusion agenda being pursued by the Bank,” Longwe said.
Zayela Business Loan facility adds to the Bank’s lending products portfolio aimed at increasing access of credit to customers for them to participate in the economy.
Getting its name from the popular terminology “Zanga Zayela” [things are well with me, in literal translation], the scheme allows beneficiaries to access as much as K25 million. The repayment period ranges between 36 months to 60 months at the interest rate of 9 percent per annum.
This project is being implemented by the Malawi government with funding from the World Bank.