MALAWI SAVINGS BANK LIMITED

PRESENTATION TO TOBACCO INDUSTRY ANNUAL SEMINAR

AT

SUN ‘N’ SAND HOLIDAY RESORTMangochi

9th Sept 2013

2012

Out line

• Key facts about the bank• Locations • Products & Services• Seasonal Loans and crops funded• Risks and mitigations• Our continued interventions• Concluding remarks.

Historical Background for the bank• One of oldest banks in Malawi

• Traces its origin back to Post Office Savings Bank, formed in 1910

• Incorporated as a limited liability company in 1994

• Granted a banking license by Reserve Bank of Malawi in 1995

• Commenced banking operations in 1995

• Business conducted under supervisory authority of Reserve Bank of Malawi

• Largest bank by distribution network

Ownership

The Malawi Government wholly owns the bank (100% shareholding)

Shareholders’ equity, Assets and Liability (2012)

Ser. No

Item Values

1. Shareholders’ Equity

K 3.5 billion

2. Total Assets K39.6 billion

3. Deposit base K30.9 billion

Branch Network

Map of Malawi Branches & Agencies

• Branches: Bt, Limbe, LL,CC, Mzuzu, Ntcheu, Nkhota Kota,

Mchinji, Zomba, Nsanje, Mwanza, Chikhwawa

13 • Service Centres: Southern Region 20 Central Region 10 Northern Region 7

• Revenue collection points 16

• Total 66

• Forex Bureau 11 • All branches and service centres are on line

real time.• Compliment with three mobile banking vans.

Products & ServicesSer. No

Depository Lending Services

1. Savings & Term Deposits Deposit Backed Loans

Local Money Transfer ( Zafika)

2. Current Accounts Consumer Loans Western Union

3. Call Accounts Corporate Loans & Overdrafts

Forex

4. FCDAs Personal Loans & Overdraft

Revenue Collection

5. Seasonal Loans/ Warehouse Receipt Financing

ATM transactions

6. Working Capital Loans

Internet Banking

7. Asset FinanceProject FinancingPre-export financing

Sms alert

Seasonal Loans • MSB is actively associated with farmers• The bank is financing the following

crops: TobaccoSoya beansMaize seed GroundnutsRice

Trend in seasonal loans 2007- 2013

2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/20130

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

Trends in Agri-business financing

Trends in Agri-business financing

RisksSer Risks Mitigations

1. Weather- too little or too much rainfall can have a big impact on the crop.

Weather Indexed Insurance/crop insurance

2. Pests and diseases Plant certified seeds and practicing crop rotation.

3. Multiple registration of farmers (2 or 3 reg. numbers rendering stop order process not effective)

Fast track biometric registration system.

Prudent selection of growers at individual /club/ location levels

4. Side selling/ marketing of tobacco and sale on other growers’ reg. certificates.

Enhance delivery of tobacco to Auction Floors.Close monitoring at field level.Strength relationship with farmers.

5. Loan default A combination of the above

Way forward

• The IPS model builds confidence to the bank and motivates us for up scaling our exposures for industry sustainability.

• Adopt “know your supplier” (KYS)• Take pro-active role to collect tobacco from

farmers to Auction Floors.• AHL to assist banks to process stop orders upon

signing by the farmer.• Register stop order with Registrar where farmer

defaulted with another merchant/bank and now uses a different registration number.

Our continued interventions Apart from farmer financing,• The Bank has now a dedicated Agribusiness

Division with Relationship Managers.• Our network of branches and service centers

brings convenience to our farmers’ business needs i.e. timely banking throughout the country within the area of industry stakeholder operations.

• Personalized and customized services to a diverse range of customers.

• Competitive rates, terms and conditions.

Concluding remarks • We are spread throughout the country as part of our

effort to complement Government’s objective of financial inclusion. MSB as a Government Bank is complementing the government’s program of promoting agriculture for economic prosperity.

• We have been funding farmers growing cash crops such as tobacco, seed maize, groundnuts etc for many years but also, alongside tobacco we finance maize and tree planting for food security and reforestation.

THANK YOU