Financial Inclusion and Entrepreneurship Scaling (FInES) Project

Malawi's micro, small and medium enterprises (MSMEs) have historically struggled to access finance, a problem compounded by COVID-19-related disruption. The Financial Inclusion and Entrepreneurship Scaling (FInES) Project is an $86 million credit from the World Bank's International Development Association (IDA), approved on 3 September 2020, with the Government of Malawi (Ministry of Finance) as borrower and the Reserve Bank of Malawi as implementing agency, working with commercial banks, microfinance institutions and development finance institutions.

The project aims to increase access to finance for MSMEs and build their capabilities, including addressing COVID-19-related disruption.

The credit is structured in four components: Liquidity Enhancement for MSMEs ($65m), Scaling Entrepreneurship and Building Firm Capabilities ($7.5m), Enhancing the Enabling Environment for Financial Inclusion ($9m), and Implementation Support ($4.5m). Financing flows include concessional loans, equity and quasi-equity, and a Partial Credit Guarantee Fund (PCGF), with the Malawi Agricultural and Industrial Investment Corporation (MAIIC) using guarantee capital to back loans from four commercial banks.

By 31 December 2023, audited project accounts show MK10.716 billion (about US$10.8m) advanced for concessional loans, equity/quasi-equity and the guarantee fund. Separately, MAIIC used US$1m (MK800m) of guarantee capital to back MK0.952 billion in guarantees, unlocking MK1.9 billion in loans from four commercial banks for 59 MSMEs. Illustrative case examples one year into implementation included an agribusiness in Ntchisi District that doubled its maize and soya production, and businesses in Salima and Chikwawa reporting revenue doubling, though these are self-reported outcomes for individual beneficiaries rather than a systematic sample.

The figures come from audited project accounts and World Bank reporting rather than an independent impact evaluation with a comparison group. They demonstrate real disbursement and a credible, though still modest relative to the $86m total, scale of guaranteed lending reaching underserved rural and small enterprises.