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Development Finance Institutions Licensing Directive

Overview

The following directive outlines the requirements for licensing development finance institutions (DFIs) in Malawi. The main objectives of this directive are to establish clear licensing requirements, specify the information required by the Registrar, and ensure that license applications are objectively and consistently evaluated.

Licensing Requirements

• A DFI is declared to be a prudentially regulated financial institution for the purposes of the Act.
• The paid-up capital for a proposed DFI must be Malawi Kwacha equivalent of US$50,000,000.

Objectives

The objectives of this directive include:

• Establishing licensing requirements
• Specifying information required by the Registrar
• Ensuring that license applications are objectively and consistently evaluated

Permissible Activities

Development finance institutions can engage in various activities, including:

• Making available medium and long-term finance for economic development
• Participating in equity in medium and long-term investments
• Guaranteeing medium and long-term loans and other financial obligations
• Mobilizing funds from sources within and outside the country to finance medium and long-term investments
• Providing technical assistance and advisory services
• Buying and selling securities

Application Process

To conduct business as an institution, a person must apply to the Registrar for a license through a written letter signed by a representative of the shareholders.