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Malawi parliament passes financial co-ops bill
LILONGWE, Malawi (2/23/11)--The Malawi parliament last week passed a long-awaited Financial Cooperatives Bill designed to strengthen the position of the country’s savings and credit cooperatives (SACCOs), or credit unions, and bring basic financial services to one of the poorest countries in world.
Click to view larger image Members line up for services at FINCOOP savings and credit cooperative (SACCO), Malawi’s largest financial cooperative.
Malawi President Bingu wa Mutharika is expected to sign the bill into law within the next three weeks. “The passing of the Financial Cooperatives Bill heralds a new dawn in the development and growth of safe and sound SACCOs in Malawi,” said World Council of Credit Unions (WOCCU) Director Sylvester Kadzola, CEO of Malawi Union of Savings & Credit Co-operatives (MUSCCO), a WOCCU member organization. “It’s an endorsement by the government that SACCOs are part of Malawi’s overall financial system and therefore require an enabling regulatory regime.” New laws resulting from the bill’s passage will help accelerate financial inclusion among Malawi’s poor by strengthening the institutions, which enables them to offer more services, Kadzola said. “MUSCCO believes passage of the bill will facilitate the modernization of SACCOs as fully fledged financial intermediaries offering modern and technology-driven financial services,” he added.
Click to view larger image The passage of Malawi’s Financial Cooperatives Bill heralds a new age for the country’s savings and credit cooperatives, according to World Council of Credit Unions Director Sylvester Kadzola. (Photo provided by World Council of Credit Unions)
WOCCU said its officials were instrumental in helping draft the bill on behalf of Malawi’s credit unions, working as part of a multi-national team to counsel both credit unions and governmental officials on the advantages of a strong cooperative sector. WOCCU also met numerous times with parliamentarians and officials from the Reserve Bank of Malawi to lobby on behalf of the country’s credit unions, and the association’s endorsement helped convince officials of the strength and merit of Malawi’s credit unions as part of a global network. “This is the successful culmination of many years of effort and will give Malawi credit unions their first-ever stand-alone piece of legislation,” said Dave Grace, WOCCU senior vice president of association services and primary author of the act. “Strong and sustained development requires both institutional capacity building and an enabling environment with strong prudential supervision. The passage of the bill was an important step forward in this second area.” Parliamentarians who spoke in favor of the bill’s passage last week said the measures contained within it to increase SACCO services and reach were long overdue. The bill also would establish a deposit guarantee fund designed to strengthen the movement and build confidence among members. “This means SACCOs will diversify their products, have ATMs and reduce operational costs,” Minister of Industry and Trade Eunice Kazembe told The Daily Times newspaper. “This means more members, and more savings for investments and industrialization.”
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