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Access to capital for women entrepreneurs in Malawi

Formal financial access in Malawi is very limited. Over half the population remains excluded. Consequently, financial service use is largely informal and lack of proximity to financial services is the key barrier to inclusion in Malawi. Financial inclusion is important for women because it helps them make payments reliably, access credit which can be invested in their enterprises, and to save. Financial inclusion has been seen to improve access to insurance products and services which are critical safeguards against risks in any type of business.

angle-left Standard Bank Malawi

Standard Bank Malawi

Standard Bank Malawi is part of the Standard Bank Group of South Africa. It is headquartered in Lilongwe but has branches across the country, with a presence in all major cities and towns.

Standard Bank Malawi does not have tailor-made financial products for women entrepreneurs. Nevertheless, the institution provides a variety of products to everyone depending on size of business. These products are:

Working Capital Loan

The Working Capital Loan is meant to supplement the short-term financing of one’s business objectives.

o The loan allows one to structure their financial planning based on cash flow

o The loan cannot be used for the consolidation of debt and/or settlement of creditors

o Evaluation principles are based on certainty of repayment source

o Collateral is based on conditions of grant including (but not limited to) cession of debtors and confirmed source of rectification

o The loan period is 6 - 24 months

Checklist for the Working Capital Loan

  • Cash flow projections
  • Financial statements
  • Bank statements (new customer)
  • Personal statements (members/directors)
  • Business profile
  • One must have operated a business for 12 months or more

Business Revolving Credit Loan

A Business Revolving Credit Loan is an unsecured loan which offers a continual revolving line of credit with the immediate availability of funds. The loan is an ongoing business loan where repayments are calculated up to a five-year period in equal monthly installments.

o This loan allows one to control redraws with structured payments

o The business can make a loan redraw up to the originally borrowed amount

o The loan can be used to finance working capital and short-term expenditure where a borrower prefers a set monthly repayment

o The loan can be used to purchase intermediate assets (assets with a medium life span) that do not fall within normal asset finance, for example, small equipment etc.

o Loan tenure can be negotiated between 36 and 60 months

o Evaluation principles are based on intuitive lending based primarily on profitability and the sustainability of the borrower

o The continuance of the revolving capability should be subject to annual review where (amongst others) turnover fluctuations are evaluated

o Collateral is based on conditions of grant and general collateral-based lending

Checklist for a Business Revolving Credit Loan

  • Cash flow projections
  • Financial statements
  • Bank statements (new customers)
  • Personal statements (directors/members)
  • One must have been in business for 12 months or more

Business Term Loan

Business term loans are meant to support a business in achieving its long-term financial goals. The Business Term Loan is used to fund fixed assets, capital expenditure including venture costs. To make repayment suitable for a business, monthly installments are matched to a business’s cash flow and the term loan is structured for a period of between 2 and 7 years. A Business Term Loan may be used to purchase/upgrade fixed property, finance fixed assets, capital expenditure or for the setup/establishment of venture costs.

o Repayments can be tailored to suit a business cash flow projection

o The bank offers a client affordable insurance cover for the loan which one can repay in monthly repayments

Competitive interest rates are offered for term loans

o A term loan may not be used for the consolidation of debt or as a substitute product for vehicle or asset finance

o Evaluation principles are based on repayment ability based on past profitability and/or cash flow projections

o Subject to first class collateral (tangible, easy realizable security) on which the bank can fall back on as an alternative source of repayment

o The period of the loan is 24 - 84 months

To qualify for a Business Term Loan, one must satisfy these conditions:

  • Cash flow projections
  • Financial statements
  • Bank statements (new customer)
  • Personal statements (members/directors)
  • If you have been in business for 12 months or more, you can apply for a Business Term Loan

Medium Term Loan

This is a loan granted for a fixed period, normally three to seven years and has a predetermined repayment pattern which is matched to the customer’s business cash flows. To qualify, one must satisfy the following conditions:

  • Cash flow projections
  • Financial statements
  • Bank statements (new customers)
  • Personal statements (members/directors)
  • Business plan
  • Business trading period for new/existing customers should be greater than 12 months

Contact information

Off African Unity Avenue, Lilongwe
Tel: +265(0)88592001
Email: customercallcentre@standardbank.co.mw
Web: www.standardbank.co.mw

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