Vice President Saulos Chilima has challenged Small and Medium Development Institute (SMEDI) to demonstrate that it can manage to disburse loans apolitically to small businesses under the planned K75 billion loan programme.
Chilima made the remarks during a meeting with SMEDI management on Monday.
The Tonse Alliance government wants to implement the K40 billion Women and Youth Loan Program under the Malawi Enterprise Development Fund and the amount will gradually be increased to K75 billion.
According to Chilima, the government wants part of the money to be loaned to Micro, Small, and Medium Enterprises (MSMEs) through SMEDI but the organisation has to demonstrate to government that it can manage to disburse loans to MSMEs across the country in an efficient, professional and apolitical manner.
“They must demonstrate that they can screen properly, disburse in time, measure impact and more importantly handle repayment.
“Depending on the satisfactory of their concept, then as Reforms and the Ministry of Industry – we will take up the matter with Treasury and other relevant stakeholders so that a portion for MSMEs from the K75 billion revolving loan could be exclusively disbursed through SMEDI.
“As a service oriented parastatal which has the data base of MSMEs across the country and with vast experience in the business of MSMEs, we are hopeful they are suitable for the task,” said Chilima.
SMEDI is an institution whose mandates include enhancing access to finance for MSMEs as well as creating an enabling environment for them to thrive as businesses.
During the meeting, Chilima challenged the management team that an institution like SMEDI, should not be funded by the government but be financially self-reliant.
He welcomed the reforms which SMEDI is implementing and lined up which are business oriented saying if properly monitored, the organisation could indeed be off government subvention in future.