Amidst challenges in accessing affordable financing for business capital, the World Bank-funded Financial Inclusion and Entrepreneurship Scaling (Fines) project has demonstrated the need for a policy to support small and medium enterprises (SMEs). The $86 million project has provided subsidized loans, enabling businesses to flourish, increase production output, and create jobs.

The Fines project has disbursed $82 million to 1,268 SMEs, exceeding its target of 1,000. Beneficiaries, such as Thanthwe Enterprise, have accessed low-cost loans, enabling them to invest in new equipment, increase production, and expand their market share. The project’s low-interest rate of 11% per annum, compared to commercial rates of 30-40%, has been instrumental in boosting output and confidence among entrepreneurs.

In Mchinji District, the project supported the Mchinji Savings and Credit Cooperatives (Sacco) with a K100 million loan, increasing its loan disbursement capacity and improving access to finance for its members, including 5,000 farmers and 2,000 salary-based members.

The project’s success highlights the impact of government intervention in addressing the cost of capital and access to finance. As Hastings Mzoma, Fines financial services development specialist, noted, “We know that we have all the opportunities in Malawi, which can help to transform the country.”

The Fines project’s achievements demonstrate the need for a policy to support SMEs, ensuring sustainable economic growth and development. By providing affordable financing, the project has empowered entrepreneurs, created jobs, and contributed to Malawi’s economic transformation.