New business registration systems to boost SMEs

Small and Medium Enterprises (SMEs) will now have easy access to loans since government has enabled them to borrow money from financial institutions using movable assets.

Government yesterday launched a modern online collateral registry system, a move that has done away with fixed assets as the only collateral for loans. This means that small scale traders who are mostly women will now access loans using property such as livestock, machinery, and vehicles.

The collateral registry, officially called Personal Property Security Registry was launched together with the Malawi Business Registration System (MBRS) at Bingu International Conference Centre.

Speaking at the launch, Vice President Saulos Chilima said the introduction of the online registration system means that the number of days it took to register a company has been reduced to five days from 38 days.

“The collateral registry is a reform initiative by government that will provide an alternative avenue for small and medium enterprises that do not have fixed assets to access loans easily and open a multitude of opportunities especially for women who form the bulk of small scale traders,” said Chilima.

The other system, the MBRS, will facilitate the online registration of businesses and automatically generate a Taxpayer Identification Number for the business.

Government hopes the system will improve Malawi’s starting business indicator which has been deteriorating over the years. The World Bank Group’s 2016 Doing Business report ranks Malawi at 161 out of 189 economies on the starting business indicator.

Laura Kullenberg, World Bank Country Manager for Malawi said the MBRS “will cut business permit processing time by more than half, significantly reducing transaction costs and saving time for businesses.”

Kullenberg also hopes the system will increase transparency and accountability, reduce corruption, and seal revenue leakages through online payment.
Malawi has become the third country in sub-Saharan Africa after Ghana and Liberia to establish a modern online collateral registry system to enable businesses and individuals access loans using movable assets.