The uptake of credit from formal credit facilities among Malawians is expected to improve following the launch of a financial literacy campaign on credit reporting and asset-based lending.

The campaign, which forms part of a broader effort to boost business activity and financial inclusion, is supported by the governments of Ireland and Norway.

It aims to promote the development of Malawi’s asset-based lending market and encourage greater use of the country’s collateral registry.

The registry, which currently has over 34,000 registered financing statements, is a centralised electronic database that records security interests in movable assets.

Deputy Registrar General Joseph Chintolo said most people who were accessing loans using movable assets were small-scale borrowers.

He, therefore, called on the public to use such assets to get loans.

“If you have movable assets, they can serve as collateral that you can present to the bank. This gives you an opportunity to plan and take stock of what you have, and what you might wish to acquire, using your assets as collateral,” Chintolo said.

Reserve Bank of Malawi Governor MacDonald Mafuta Mwale stressed the importance of financial literacy.

Mwale further noted that credit reports, which are available from credit reference bureaux, could help people secure loans and, in some cases, negotiate better interest rates.

He encouraged Malawians to take advantage of this opportunity.

“We want to bring to the nation a campaign that will educate the nation on how they can use their credit reports in order to access financing for their different activities to contribute to the growth in Malawi.

“Malawians should take advantage of this campaign and understand how a credit report supports them to borrow money and how they can use all the assets that they have as collateral to borrow money and promote their businesses,” Mwale said.

The governor further pointed out that Malawi was not producing enough for local consumption or export and that, therefore, the campaign would empower people to get loans, increase local production and access both domestic and international markets.

The 12-month financial literacy campaign on credit reporting and asset-based lending will be implemented through various media to raise awareness and educate the public.