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FARMSE invests K11.6bn in 17 rural financial inclusion projects


Financial Access for Rural Markets, Smallholders and Enterprise Programme (FARMSE) has invested K11.6 billion in the 17 projects aimed at reducing poverty, enhancing resilience and improving livelihoods in rural areas.

FARMSE started operations in July 2018 with funding from the International Fund for Agricultural Development (IFAD), which contributed US$42 million from a total budget of US57.7 million and Malawi Government contributed US$9.6 million while the private sector contributed US$6.1 million.

In the course of implementation, NORAD joined with a funding of US$435, 000 to support nutrition mainstreaming.

Speaking at the launch of the 17 projects in Lilongwe, Governor of the Reserve Bank of Malawi (RBM) Wilson Banda said the launch of the second round of the IFAD-funded rural financial inclusion projects signifies the commitment by the Malawi Government to ensure that rural communities are not left behind in the financial inclusion agenda.

RBM Governor Wilson Banda (right) toasting to the launch of the 17 rural financial inclusion projects under FARMSE Programme

“Rural communities are highly underserved with financial services. Traditionally, formal financial institutions have avoided or failed to offer sustainable services in rural areas with the perception that rural communities are not bankable. I am pleased to note that increasingly the formal financial service providers are working with the FARMSE Programme not only to reach the rural masses, but to create a commercially sustainable business with the rural clients,” said Banda.

The RBM Governor disclosed that a total of 2, 585 banking agents, including NBS Bank Pafupi, FDH Bank Pakhomo, and Standard Bank Unayo agents, have been established in rural areas with the support of FARMSE Programme and over 407, 000 rural clients have been reached with either the banking agents or mobile banking services.

Banda said this has enabled rural people to access financial services close to their homes through agents and even the ability to carry out some financial transactions in the comfort of their homes through mobile banking platforms.

“These innovative services will be expanded further through projects being launched tonight. This is what we call real development in the sector,” he narrated.

In her remarks, IFAD Country Representative Ms Bernadette Mukonyora said her organization is financing FARMSE in order to support household economic development through access to financial services that are appropriate to each socio-economic level of poverty.

Mukonyora said she was impressed that the projects FARMSE is implementing have helped to graduate poor Malawians from ultra-poor to a productive pathway through household economic development and access to financial services that are appropriate to each socio-economic level of poverty.

“The strategies to various levels include graduation programmes and engagement of community-based financial organizations, financial co-operatives, MFIs, and commercial banks to provide services to FARMSE target groups. Today, we are witnessing the launch of the 2nd round of service provider recruitment under FARMSE, various partners have been selected to support the implementation of the interventions – ultra poor graduation, strengthening of community based financial organizations and the implementers of the innovation & outreach facility,” she said.

The IFAD Country Representative observed that the demand for rural financial support cannot be greater with what Malawi has witnessed in the Southern Region where individuals and households will bear the brunt/cost of rebuilding their livelihoods.

FARMSE National Programme Coordinator Dixon Ngwende disclosed that the interventions have helped 15, 800 households meet graduation requirements from the initial target of 15, 000 while 4, 000 are on track to graduation.

Ngwende: The first component of the programme has helped 15, 800 households to graduate from poverty

Ngwende stated that the programme will be adding 12, 500 through the implementation of five projects just launched.

“The programme is supporting VSLAs to go beyond savings and loans to facilitate household economic growth. Through 26, 000 VSLAs reached, we have reached 600, 700 CBFO beneficiaries with 65 percent (359, 000) women and 20 percent (109, 000) youth. The new projects target an additional 150, 000 beneficiaries. About 1, 800 groups have been linked to markets for agricultural commodities and 5, 400 are linked to formal financial services,” he reported.


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