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Good practice Imported

Financial Inclusion and Entrepreneurship Scaling (FInES) Project

Malawi · Lilongwe · See the Malawi profile · See the Lilongwe profile

Evidence: Descriptive / self-reported Top 54% 67/100 · Ask Evidence Copilot about this practice

An $86m World Bank project channels liquidity and credit guarantees to Malawian MSMEs via the Reserve Bank and commercial banks. Audited accounts show MK10.7bn advanced and guarantees unlocking MK1.9bn in loans for 59 MSMEs by end-2023.

86 USD million
IDA credit approved (2020)
65 USD million
Liquidity Enhancement for MSMEs component
7.5 USD million
Scaling Entrepreneurship and Building Firm Capabilities component
9 USD million
Enhancing the Enabling Environment for Financial Inclusion component
4.5 USD million
Implementation Support component
10.8 USD million
Disbursed for concessional loans, equity and guarantee fund (as at 2023-12-31)
59 MSMEs
MSMEs reached via MAIIC-backed guarantees
Financial Inclusion and Entrepreneurship Scaling (FInES) Project

Details

Maturity
Scaling
Promoter
Reserve Bank of Malawi & Government of Malawi (Ministry of Finance), financed by the World Bank/IDA
Period
2020–present
Keywords
MSME finance, credit guarantees, financial inclusion, entrepreneurship

Context

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.

Objectives

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

Activities

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.

Results

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.

Conclusions

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.

Implementation
Indicative cost
Very high (> €5M) — $86 million IDA credit across four components ($65m / $7.5m / $9m / $4.5m).
Time to results
Long (> 3 years) — Approved September 2020; multi-year implementation ongoing as of the most recent audited accounts (2023).
Staffing & skills
Reserve Bank of Malawi (implementing agency), Government of Malawi, Ministry of Finance (borrower), Commercial banks, microfinance institutions and development finance institutions (on-lending partners), Malawi Agricultural and Industrial Investment Corporation (MAIIC, guarantee administration)

Conditions for success

  • World Bank/IDA concessional financing at sufficient scale to absorb demand
  • Functioning partnership with commercial banks willing to on-lend against partial credit guarantees
  • Capacity within the Reserve Bank of Malawi to manage multi-component disbursement

Common failure modes

  • Disbursement lagging well behind the committed $86m total (only ~$10.8m advanced by end-2023)
  • Guarantee-backed lending reaching a still-small number of MSMEs (59) relative to national need

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Where this practice's information was retrieved from, and when.

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