(By Vinjeru Ngwira)
In view of strengthening depositor protection and reinforcing stability in Malawi’s financial system, the Deposit Insurance Corporation (DIC) has announced plans to extend its deposit insurance coverage to include deposit-taking microfinance institutions.
DIC Manager for Operations, Lowina Mwasigala, made the announcement in Mzuzu on Friday during a media engagement with members of the Association of Business Journalists (ABJ) and other journalists from various media organisations.
She explained that the existing legal framework already permits the corporation to broaden its coverage beyond commercial banks to other institutions that mobilize public deposits. Mwasigala further indicated that preparations are underway to onboard other licensed deposit-taking microfinance institutions into the scheme.
She emphasized that the DIC’s mandate remains strictly limited to protecting depositors’ funds, and therefore applies only to institutions that accept deposits, excluding credit-only entities.
Currently, the deposit insurance scheme covers customers in all eight commercial banks licensed by the Registrar of Financial Institutions, providing protection in the event of bank failure.
However, recent figures show a decline in commercial bank depositors, which has dropped from about 2.9 million to 2.7 million, pointing to shifting saving behaviours among the public.
One of the participants, Jackson Sichali, said journalists, as the voice of the masses, have a responsibility to sensitize the public on the importance of saving with licensed financial institutions, noting that deposit insurance through the DIC ensures recovery of funds in cases where banks collapse.
The development comes amid the growing prominence of deposit-taking microfinance institutions, which continue to expand as alternative saving platforms across the country.