A Financial Stability Report by the Reserve Bank of Malawi (RBM) has outlined that on-performing loans (NPLs) went up by 46.5 percent in the second half of 2019 to K40.3 billion in December from K27.5 billion in June.

In the report, RBM attributes the above to business stagnation which led to delayed payments and easing of underwriting standards by banks due to competition. On the other hand, the central bank says the highest NPLs were reported in the wholesale and retail sector followed by community, social and personal services sector, Construction sector, Transport sector and the Agriculture sector.

Meanwhile, since the past 2 weeks, dollar stocks in commercial banks have been on the decline, as commercial banks are now trading the Kwacha between K740 to K745 to a dollar. RBM Governor Dalitso Kabambe, the current forex scarcity in some commercial banks of the country, is seasonal. Kabambe outlined that foreign exchange reserves slightly go down around this time and pick up after the tobacco marketing season, which is the norm.