Export Development Fund (EDF) – a subsidiary of the Reserve Bank of Malawi (RBM) – and Norsad Capital have signed a memorandum of understanding (MoU) that seeks to address funding challenges that enterprises in Malawi face.
Some of the problems hindering enterprises’ growth in Malawi include inadequate innovative financial instruments and short breath of available long term financing that is key to business expansion and development of strategic start-ups, such as industrial parks, export trading companies, mining venture, mega farms, and large scale specialised agro-processing industries.
The cited sectors have been highlighted as key to Malawi’s industrialization as well as effective integration into the regional value chain under the African Content Free Trade Area (AfCFTA).
Speaking at the MoU signing ceremony that took place at the Bingu International Convention Centre (BICC) in Lilongwe on Wednesday, RBM Deputy Governor, Mr. William Matambo, said the pact represents a significant milestone in Malawi’s efforts in ensuring that there are multiple sources of financing solutions to support the growth of the private sector.
“I am aware that Norsad Capital is an impact investment company established to contribute to the private sector development of Southern African economies by providing funding to enterprises that are financially, socially and environmentally sustainable. This aligns very well with EDF’s objectives which aim at positioning the institution to be a pivotal force in development finance within the country,” said Matambo.
He noted that Norsad Capital has a 33-year track record of investing in Africa and so far, it has made investments of over USD 700 million in more than 170 companies in various sectors in Africa, with some of the projects financed in Malawi.
The RBM Deputy Governor said the signing of the pact had therefore opened a new chapter where more businesses would get a share in the Norsad stake.
“This partnership between EDF and Norsad Capital will bring about many positive changes and contribute significantly to the growth and development of our private sector. As a country we need more strategic partners like Norsad Capital who are very key in providing financing solutions that are easily accessible and affordable especially for our key export-oriented projects and enterprises, and of course initiatives that are geared towards supporting industrialization and structural transformation of our economy,” he said.
He applauded EDF for its efforts in providing financing support to Malawians exporters and businesses.
EDF Board Chairperson Dr. Neil Nyirongo said their collaboration with Norsad Capital fortifies the means to resource gap-filling as contribution to fulfillment of Malawi’s growth and development objectives.
Nyirongo added that the pact serves as a tool for illuminating potentials that might have otherwise been concealed, undiscovered, and therefore untapped.
“Further, this MoU commits us to work together more closely towards our common goal. I thank the teams at EDF and Norsad Capital that have worked tirelessly to bring this MoU to fruition. The gratitude extends to our partners, stakeholders, and the entrepreneurs as a necessary set of architects in building Malawi’s future. May this MoU mark the beginning of an era where funding gaps are bridged, opportunities seized, and our Nation’s potential realized to the fullest,” he said.
In his remarks, the EDF Managing Director Fredrick Chanza expressed conviction that the signing of the MoU held profound significance to Malawi’s missions, which are aligned with the unique needs of Malawi’s business ecosystem, particularly in addressing funding gaps that have impeded the growth of our promising enterprises.
Chanza said EDF therefore seeks to increasingly empower local enterprises through provision of a range of financial solutions with wider a quantum.
“From debt financing to equity participation and project financing, we are committed to nurturing viable businesses that contribute to Malawi’s economic prosperity. Accordingly, our partnership with Norsad Capital will further amplify our capacity to bridge these funding gaps. Through the syndication of transactions, we can seize opportunities that may otherwise be too substantial for individual financing, or where a more diverse capital structure is needed,” he said.
Chanza added, “By pooling our resources and knowledge together, we are creating a powerful partnership that will not only bolster the financial resilience of businesses but also elevate their potential to create positive change in Malawi.”
Norsad Capital Chief Executive Officer Kenny Nwosu described the MoU as a commitment to action, stressing that it sets out the terms of the two institutions’ partnership, primarily focused on co-transactions aimed at increasing investments in Malawi.
Nwosu said by leveraging their collective strengths and expertise, they will create a conducive environment for growth and positively impact the lives of Malawians.
“Norsad Capital, formerly known as Norsad Finance, is an impact investor and private credit provider, specialising in tailored debt solutions to profitable growth companies across Africa. We have rebranded the organisation to ensure alignment with the new strategy and to create a brand message that speaks to our work, our purpose, and our values,” he said.
“Our new brand positions Norsad as a pre-eminent private credit impact investor in Africa. At Norsad, we believe that one great partnership can make all the difference and we are excited about this partnership with EDF, which can contribute significantly to our impact goals,” added Nwosu.