Standard Bank Group has revealed in its most recent release that higher interest rates and tough economic conditions in Malawi are affecting its operations in that small south-eastern African country, especially desire to offer loans to customers.
“Tough economic conditions and concerns on the high interest rates continue to impact the group’s appetite to lending; this has in turn negatively impacted the overall growth of the loan book,” read a part of the statement.
Standard Bank, which is also listed on the Malawi Stock Exchange, added that it expects Malawi to embark on an expansionary policy framework in 2015.
The bank is one of South Africa’s largest financial services groups. It operates in 32 countries around the world, including 19 in Africa.
Economists in Malawi say the country is likely to face a prolonged financial downtime in 2015 unless the government can regain the confidence of donors, who are still withholding 40 percent of budgetary support due to the corruption scandal known as “Cashgate”. More than $30 million were looted from government coffers in the scandal, and several people, including government officials, were arrested.
The withholding of donor aid has forced Malawi to pass what is known as the Zero Aid national budget for the 2014-2015 fiscal year.
By George Mpofu