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Microfinance Pricing Report: Malawi

Published on October 23, 2013

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Languages available: English

The Malawi Microfinance Pricing Report 2013 presents in-depth analysis of the prices paid by microfinance borrowers in Malawi. The report draws out key themes, features and trends in pricing, basing its analysis on prices calculated using original loan documentation representing real client loans in Malawi. The report covers the loan products accessed by 332,630 of Malawi’s borrowers, representing 97% of the total market. 

This analytical report was prepared by MFTransparency in partnership with Planet Rating and with funding from MasterCard Foundation.  Further data collected via the Transparent Pricing Initiative can be seen, downloaded and interacted with on the Malawi pages of MFTransparency’s Pricing Data Platform.  

Malawi CPR Key Stats

Executive Summary

  • The institutional level Pricing Transparency Index ranges from 20 to over 100 in Malawi. The transparency of prices is relatively high for the region but still leaves much room for improvement.
  • Approximately 65% of borrowers benefit from loans priced transparently, receiving microloans from products that have a Transparency Index of 75/100 or above.
  • This transparency level is explained by pricing practices consisting of multiple price components: 64% of borrowers receive loans have an interest rate calculated using the declining balance method – this is higher than most other countries in the region; fees are common, with 84% of borrowers paying at least one fee in addition to the interest rate; and 75% of borrowers must also purchase insurance with their loan. In addition, 46% of borrowers must provide compulsory deposits in order to access their loan.

 

 

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