Malawi's government has ordered banks and mobile money service providers to reduce fees on all electronic money transactions.

Malawi’s president Peter Mutharika has ordered banks and mobile money service providers to reduce fees on all electronic money transactions to promote the use of electronic money services after the country confirmed 16 COVID-19 cases and two related deaths.

As has been done in Rwanda and Zambia, Malawi’s government wants to increase digital transactions to minimise physical contact with cash.

Mutharika said the treasury must enforce the directive during the period of partial lockdown.

He also ordered banks and micro-financial institutions to observe a three-month moratorium in interest and principle repayments for all loans contracted by micro businesses and SMEs.

“These measures are aimed at cushioning the impact of COVID-19,” said Mutharika.

However , CEO of the Institute of Bank in Malawi (IOB), has expressed some reservation and was quoted by the local Nation newspaper saying: “There are a number of factors to be considered before reducing fees and charges on electronic money transactions.”

Chancellor Kaferapanjira, CEO for Malawi Confederation of Chambers of Commerce and Industry has told the media that “the chamber expects banks to implement the measures smoothly for the benefit of the sector.”

Malawi’s mobile money market is growing steadily as the government pushes for financial inclusion.

According to a 2019 Q4 report by the Reserve Bank of Malawi (RBM), the country has a total of 6.2-million mobile money subscribers.

The report said the number of mobile money agents network has also grown by 4% to reach 52, 200 as of December 2019, thereby increasing the number of access points across the country.