Challenge
More than one-third of Malawi’s population lives below the poverty line and millions of people face acute food insecurity. The vast majority of adults work as smallholder farmers growing maize, sweet potatoes, bananas, and other staples. But most of these farms exist outside of the formal economy, and often lack the collateral required to access loans. Similarly, there are more than one million small businesses in Malawi that employ about 20 percent of the adult population, but typically they do not have access to commercial bank loans.
Solution and Impact
A $5 million DFC loan portfolio guaranty is helping NBS Bank increase lending to small businesses in Malawi. NBS Bank, an award-winning bank with 25 branches across Malawi, is seeking to diversify its portfolio beyond corporate and retail banking by increasing lending to small businesses. Half of the lending is earmarked to agriculture, clean cooking, fisheries, and forestry.
By focusing on loans in the agriculture sector, the gauranty will also help address the country’s chronic food insecurity.
This project was profiled in 2024.