My Bucks forecasts stable macroeconomic environment for Malawi despite Covid-19 threat

By Madalitso Mhango

Banking group, My Bucks, says Malawi’s macroeconomic environment will still remain stable with positive gross domestic product (GDP) growth rate though the emerging Covid-19 pandemic impact remains a major source of uncertainty to the attainment of the projected GDP and inflation targets for the 2020 fiscal year.

In a statement on the financial outlook for the year 2020 contained in the Corporation’s Audited Financial results for the year ended December 31, 2019, My Bucks says the emerging public health challenges of covid-19 remain a risk to the attainment of economic growth targets as well as overall performance of businesses in the medium to long term.

“The global economy is officially in a recession with forecasted growth of 24% from 2.9% on account of the economic impacts of coronavirus,”says the Banking Group in the statement signed by Board Chairperson Francis Pelekamoyo.

Pelekamoyo, however, sounds optimistic on the prospects of the local economy saying Government and the Central Bank have put through some economic and health measures to cushion the effects of the pandemic on the economy.

Measures that have been employed by the monetary authorities include reduction in liquidity reserve requirements for the bank by 125 basis points to 3.75% from 5% activation of emergency liquidity assistance facility to the bank, and prompt corrective action directive beyond 90 days in the event that the bank fails on prudential capital requirement as a result of covid-19.

Pelekamoyo states that in an attempt to help the business community cushion the impact of covid-19, the local banking industry has also agreed to implement a number of measures including to immediately provide a three months’ moratorium on interest and principal repayments for loans borrowers on a case by case basis, restructure and refinance or renegotiate loans for small and medium scale enterprises, corporates and other borrowers affected by covid-19, and reduce by 50%charges related to the banking, mobile payments and other related services.

He also says as one way of assessing its resilience and adaptability,My Bucks has conducted stress tests to various shocks that the pandemic will have on its performance and ability to continue as a going concern and to be fully compliant with various directives issued by the Registrar of Financial Institutions.

Pelekamoyo says the good news is that in the tests, the Group has shown resilience to all shocks and this provides confidence to the investing community in the Group’s ability to continue as a going concern and to serve its various stakeholders in the economy.

“We remain upbeat and committed to offer a consistent and relevant customer experience. In order to achieve excellent customer experience, the Bank has embarked on a journey to be a truly digital bank by offering enhanced digital platform that will take customers’ satisfaction to a new level,” he says.

The report further says the Group will also continue to focus on achieving growth through acquisition, mergers and organic means where necessary to the year end.

Meanwhile,My Bucks has concluded the acquisition of Nedbank Malawi and fully integrated its operations into My Bucks, the acquisition that will enable the Group to serve its stakeholders from additional points of representation and also continue to offer unique products to customers.

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