Reserve Bank of Malawi

Financial Sector Regulation (FSR) - Capital Markets & Microfinance Regulation

Financial Cooperatives Regulation

The Registrar of Financial Institutions regulates financial cooperatives also commonly known as Savings and Credit Cooperatives (SACCO) under the Financial Cooperatives Act 2011 (FCA) and the Financial Services Act 2010 (FSA). Chartering of the financial cooperatives is done by the Registrar of Cooperatives under the Cooperatives Societies Act 2000. However, the licence to conduct SACCO business is issued by the Registrar if Financial Institutions under the FSA. This licence enables the financial cooperatives to transact the business of mobilising savings and advancement of credit facilities to their members.

The organisation structure of financial cooperatives in Malawi is premised on the principle of cooperation among cooperative enterprises and is founded on the vertical organisation of the cooperative enterprises namely, primary, secondary and Apex cooperatives. This structural organisation is provided for under the FCA and each category is uniquely defined on the basis of qualification for membership and service provision to such members.

Regulations for Microfinance Institutions

Microfinance, defined as the provision of financial services in limited amounts to low-income persons and small, informal businesses, is governed by the Microfinance Act 2010 and the Financial Services Act 2010. It is offered by a variety of formal financial institutions including banks and non-banks, either as their core business or part of a diversified portfolio.

The regulatory approach is commensurate with the type, complexity and size of transactions. The law categorises providers of microfinance services into deposit taking and non-deposit taking microfinance institutions. The Registrar of Financial Institutions, in his mandate, aims at protecting depositor’s funds, enhancing access to financial services by increasing public confidence in microfinance providers and improving operational standards.

Securities Market Regulation

The Securities Act 2010 and the Financial Services Act 2010 are the main pieces of legislation that govern the securities market in Malawi. The mandate of the Registrar of Financial Institutions in this regard, is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation

The laws and rules that govern the securities market in Malawi derive from a foundational concept that all investors, whether corporates or individuals, should have access to basic information about an investment prior to purchasing it, and so long as they hold it. To achieve this, the Registrar requires listed companies and those aspiring to go public to disclose meaningful financial and other information to the public. The disclosures must be timely, comprehensive and accurate to allow the public make sound and informed investment decisions. This is where our mandate for financial consumer protection becomes more pronounced.

The Registrar oversees the key participants in the securities market including securities exchanges, commodities exchanges, securities brokers and dealers, transfer secretaries, investment advisors, fund managers and other intermediaries as permitted under the Securities Act 2010.