In a joint effort between FINCA, Kuunda, and Airtel, the Mgodi Overdraft Facility project was unveiled on October 31, 2023, with the aim of alleviating liquidity challenges faced by mobile money agents.
This initiative, a pivotal component of the Digital Financial Services for Resilience program, marks a significant milestone in addressing financial hurdles encountered by agents.
Implemented by the UN Capital Development Fund (UNCDF) and generously supported by the European Union (EU) and the Organisation of African, Caribbean, and Pacific States (OACPS), the program’s overarching goal is to combat poverty, foster financial inclusion, accelerate economic recovery from the COVID-19 pandemic, and fortify societal resilience.
Iris Kissiti, the Digital Finance Country Specialist for UNCDF Malawi, lauded the partnership during the project’s launch, expressing confidence that it would substantially augment revenues for agents, create fresh income prospects, and propel growth within the Micro, Small, and Medium-sized Enterprise (MSME) sector.
“The Mgodi Overdraft Facility is a testament to the power of collaboration in the digital financial sector. It aligns perfectly with our mission to foster financial inclusion, economic resilience, and poverty reduction,” remarked UNCDF Malawi Digital Finance Country Lead, Iris Kissiti.
Fraser Mdwazika, Director for National Payment Systems of the Reserve Bank of Malawi, who was the guest of honor emphasized that the Mgodi Overdraft Facility would ameliorate liquidity pressures in the country.
He asserted that Mgodi represents a significant stride in Malawi’s digital revolution, asserting that it would not only alleviate liquidity constraints but also enable Airtel money agents to realize substantial commissions through mobile transactions.
“This facility is important as it will ease liquidity pressure that agents experience and will also help agents increase their commissions because the more they do transactions in terms of volume and value, the more they will be able to generate revenues,” he explained.
Furthermore, Mdwazika underscored that the newly introduced Mgodi overdraft facility is a breakthrough in achieving Malawi 2063.
“One of the pillars of the Malawi 2063 agenda is attaining an independent economy where most transactions will be done electronically. We are also implementing a digital platform that will enable e-payment gateway and e-commerce. Business operators will be able to advertise, sell and get paid online,” he elucidated.
Charles Bello, Chief Executive Officer of FINCA, applauded the Mgodi Overdraft Facility for laying the foundation of an innovative liquidity marketplace. He emphasized that this marketplace would foster collaboration among Financial Service Providers, building trust and bolstering consumer confidence in the Digital Financial Services and mobile money ecosystem.
“We are excited to be part of this transformative initiative. The Mgodi Overdraft Facility would not only boost the financial health of mobile money agents but also contribute to the realization of Malawi’s 2063 agenda, highlighting the nation’s commitment to harnessing digital technology for sustainable development,” said Bello.
Virginia Jere, Head of Marketing for Airtel Money, highlighted that the Mgodi overdraft facility addresses the liquidity challenges faced by Airtel money agents in the country. She further stated that agents would now be able to conduct transactions even when their mobile phone wallets have insufficient value.
“This is an exciting moment for us. There has been a challenge to our agents to manage their available liquidity so Mgodi overdraft facility has come to address that. For our customers to do transactions on Airtel money, it requires e-value, and for them to have e-value they get from agents. This means that the product is not only beneficial to us but also an opportunity for agents to make revenues through commissions,” Jere explained.
Yohane Samson, representing Airtel money agents, echoed his enthusiasm for the Mgodi overdraft facility. Operating his business in Bwandilo, Area 47, he expressed optimism that this initiative would enable them to serve their customers with greater ease and efficiency.
