WOCCU Monitors Progress to Malawi's Government Reforms

October 13, 2004

l-r: Sylvester Kadzola, MUSCCO CEO; Arthur Arnold, WOCCU president and CEO; British High Commissioner and K.Z. Makiyoni, MUSCCO Board Treasurer pose for photo

Madison, WI-WOCCU's president and CEO, Arthur Arnold recently made a follow up visit to government officials in Malawi in order to monitor progress made by government and credit unions (SACCOs) on resolving major issues of concern addressed at a previous meeting earlier this year.

In particular, the withholding of salary payments by the government for public sector employees has had a negative impact on SACCOs in terms of loans and savings. Earlier this year Arnold called these practices totally unacceptable. At that time the amount belonging to the members of SACCOs that was withheld by the government was MR$50 million.

Since then the government has changed. The new government has started to release funds, gradually reducing the amount outstanding. During a visit with the new Minister of Trade and Private Sector Development, Eunice Kazembe, Arnold thanked the new government for not engaging is such practices and for having brought down the outstanding amount to MR$15 million. He urged the Government to release these last funds as well, which is equal to US$150,000, a substantial amount money in a country where the per capita income amounts to US$137 per year.

At the meeting with Minister Kazembe, Arnold was accompanied by Sylvester Kadzola, CEO of Malawi Union of Savings and Credit Cooperatives (MUSCCO) and WOCCU board member, representing Africa and MUSCCO board chairman Dickson L. N. Banda.

During the meeting Minister Kazembe pledged to give full support to the SACCO movement, and is committed to start using the SACCOs for future development of the private sector in Malawi. There are 70 SACCOs in Malawi with a membership of 55,000. Of the 70 SACCOs, 16 are teacher- based, 35 employer-based, and 19 community- based.

Together with MUSCCO representatives Arnold also met with the British High Commissioner, Norman Ling, who is a strong supporter of SACCOs in Malawi. The Department for International Development (DFID), the British government donor, reporting to the High Commissioner, is proving funding for a SACCO project in the capital, Lilongwe.

Arnold also conducted a workshop on "Good Governance" for 20 SACCO leaders from all over the country, as well as government officials. Arnold engaged the group in a discussion of corruption as enemy no. 1 for development, i.e. growth, including in SACCOs. He also shared the draft Best Practices Principles for Good Governance that WOCCU will launch at the end of this year in World Council's publication, Credit Union World.

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