By Zanak Matekenya – Mana.
Learners at Kodole Primary School in Chitipa call him Maatumba, meaning smoker, not because he is a smoker himself, but because he rebukes pupils who attempt smoking using that name.
On a pay slip, Maatumba is known Maclean Mgala.
Mgala has worked under Ministry of Education as Primary School teacher for over 26 years and in the early days of his profession he was receiving his salary by hand.
Years later, when government started paying Civil Servants through Banks amid rise in robberies, he did not hustle to access his price of labour as schools he was assigned to, were not far from Banks. Everything was rosy.
However a transfer from Karonga to a remote part of Chitipa about five years ago brought Mgala a new experience in teaching profession.
“Pay days stopped bringing excitement they used to. Every month-end I needed to find money for transport to cash my salary at the Bank in Karonga. A numerous occasions I found myself borrowing money for that purpose,” he recalled.
This has been the case until the birth of Financial Access for Rural Markets, Smallholders and Enterprise (Farmse) Programme under the Ministry of Finance, Economic Planning and Development.
Farmse was introduced in 2018 to promote access to financial services in rural areas through provision of funds to various organizations, both local and international.
Framers of the programme whose goal is to reduce poverty, improve livelihoods and enhance resilience of rural households envisioned easy access and use of sustainable financial services by rural households and micro, small and medium enterprises.
This line of thinking was what brought relief to Mgala, who by the year 2020 was spending over K8, 000 every month to withdraw his salary in Karonga.
This is common challenge among workers in rural parts of the country in the sectors of education, health, agriculture and other sectors.
Because of Farmse, Mgala is now able to access his salary at a distance of about 4 kilometres from his home.
Among institutions funded by Farmse to achieve its goal is New Building Society (NBS) Bank, which is implementing a project called Enhancement of Outreach of Formal Financial Services in Rural Areas since 2019.
Through the project, NBS Bank is partnering with Small and Medium Enterprises (SMEs) operating in various trading centres in rural areas to offer banking services on behalf of the Bank. These SMEs are called Bank Pafupi Agents.
Mgala confesses that establishment of a Bank Pafupi agent at Kapoka Trading Centre in Chitipa has saved him money and time to Karonga where he could wait on a queue before withdrawing his salary.
“I used to pay K4 000 to and from Karonga but because of the Covid-19 the fare had gone up to K8 000,” he explained.
Mgala hinted of saving the K8 000, he used to spend on transport in a village saving group every month where he could realize over K 150 000 in savings and profits in one year.
At Songwe Border, an employee for Ministry of Agriculture, Baleke Kishombe said on top of saving transport money and time to Karonga Boma, he finds agency banking exciting because of its flexibility in accessing a service.
“Travelling 45km to Karonga Boma for banking services was not only costly and time consuming. With agency banking I am able to make withdraws or deposit seven after 3pm, let alone on Sundays and holidays, this not the case with a fully-fledged bank,” he said.
On the other hand, Enhancement of Outreach of Formal Financial Services in Rural Areas turns out to be a game changer for SMEs who through working as Bank Pafupi agents have expanded their profit margins in commissions and creation of new customers.
A Bank Pafupi agent at Kapoka, Happy Mamoto who serves as bank teller for Mgala said on top of commissions she gets from NBS Bank, the banks clients buy from her hardware shop after withdrawing their money.
She said on average she receives 10 clients in day and that some of the clients come from Misuku a distance of about K 2 000.
Mamoto added that working as an agent makes her feel secure and safe from theft as most of money she makes in her shop end up in the bank’s customers’ hands through withdrawals.
Another agent at Songwe Border, Elia Sulumbu said besides employees, his profit base was boosted by cross border business players between Malawi and Tanzania.
NBS Bank Cluster Manager for Mzuzu, Aaron Gumbo said the Bank had opened about 20 000 bank accounts between January and May 2020 through banking agency alone a development he described as a very big achievement.
“We have registered 116 Bank Pafupi Agents who are operating and have helped us to open new accounts through agency banking,” he said.
Gumbo said Bank Pafupi agents have helped the bank save money in ensuring provision of better services to its customers.
“For instance, if we were to use a mobile van from Karonga Boma to Songwe, a distance of about 50 km, we could spend about K1.5 million a month, but as of now we are able to save that money as our customers are using Pafupi agents,” he disclosed.
Enhancement of Outreach of Formal Financial Services in Rural Areas project which runs between 2019 and 2022 aims to establish 1, 000 Bank Pafupi Agents across the country and 50, 000 bank accounts, the target Gumbo said the bank will surpass.
The project targets 2, 500 small holder farmers with loans all these at a budget of K 1, 229, 236, 452.
Farmse Knowledge Management and Communications Officer, Golie Nyirenda said to achieve its goal, the programme was supporting financial service providers to develop demand driven simple to use and low transaction cost savings and loan products suitable for low income rural households.
She added that the programme supports value chain finance to small holders and extremely poor to create employment in rural areas.
A 2018 RBM report indicated that although Malawi registered a surge in digital financing services, penetration of the same remained minimal in rural areas.
Consumer Association of Malawi (CAMA) Executive Director, John Kapito appealed to authorities to handle the issue with the urgency it needed saying the development would affect the country’s financial inclusion drive.
Farmse programme runs between 2018 and 2025 to total tune of US$ 57. 7 million over K42.5 billion funds from International Fund for Agricultural Development (IFAD), Malawi government and Private Sector.