Bank clients waiting to move money

Breaking Banking Barriers

SADC’s initiative for regional banking has helped Member States improve their banking systems and broaden access for the region’s citizens.

  • Facebook Social Icon
  • Twitter Social Icon
  • Google+ Social Icon
  • YouTube Social  Icon
  • Pinterest Social Icon
  • Instagram Social Icon

“About 75% of Malawi’s people have access to mobile phones, which means we have to reach out to the unbankable populations through mobile phones.”

Banking has remained out of reach for millions of Southern African citizens, prompting regulators

and banks to work harder to ensure that more than a privileged few benefit from banking services.


Many people in rural areas of the region may never see the inside of a bank. Statistics released by

the State Bank of Mauritius, for example, show that up to 80% of Africa’s adult population is

unbanked for a range of reasons.


The SADC Protocol on Finance and Investment, signed in 2006, addresses some of these

challenges. It seeks to accelerate growth, investment and employment in the region through

increased cooperation, coordination and management of macroeconomic, monetary and fiscal

policies. It also works to establish and sustain macroeconomic stability as a precondition for

sustainable economic growth and for the creation of a monetary union in the region.


One initiative for greater financial integration was the introduction of the SADC Integrated

Regional Electronic Settlement System (SIRESS) as a crossborder payment solution. All SADC

currencies, including the US Dollar, have been approved by the Committee of Central Bank

Governors as settlements in SIRESS.


According to SADC Banking Association Executive Secretary Maxine Hlaba, the system is paying

off across the region.


“We now have 83 participants on SIRESS made up of 76 commercial banks and seven central

banks. Fourteen countries are now live on SIRESS, and we continue to bring on board more banks,”

says Hlaba.


She adds: “As at the end of April 2017, the total number of transactions settled through SIRESS

was 733,597, representing a value of USD 244.7 billion.”


There are also local benefits as the banking association has worked to help banks in Member States

to attain the necessary levels of delivery to join as well as to promote financial inclusion.

In Malawi, for instance, the challenge to get people into the banking system is not only economic

but also one of perception. Citizens believe brick and mortar institutions are only for the rich,

according to the Institute of Bankers’ Executive Director Lyness Nkungula.


“About 75% of Malawi’s people have access to mobile phones, which means we have to reach out

to the unbankable populations through mobile phones,” she says, adding that there are definitely

opportunities for expansion.

All of Malawi’s ten banking group are

adopting new technologies. As members of

SIRESS, they recognise the need to focus on

the majority of the population who do not yet

have formal bank accounts.


The Institute of Bankers in Malawi is working

closely with the financial sector to use mobile

phone-driven technology to add millions of

new customers. The Reserve Bank of Malawi

(RBM) published guidelines for digital

financial services and drafted the E-Money

Regulation and Payment Systems Law to

guide the financial sector.


Nkungula says bankers in Malawi are aware that SIRESS is vital to allow the nation to continue to

develop: “We decided to join SIRESS in October 2015 because we’re a family within the SADC

region and thought that if left out, then we’d be left out for good in terms of technology. It would

have become challenging for us to trade with the other countries in the region.”


Malawi joined Angola, Botswana, DRC, Lesotho, Namibia, Mauritius, Mozambique, Seychelles,

South Africa, Swaziland, Tanzania, Zambia and Zimbabwe – who are all part of the SADC Banking

Association constituted in 1998 – in the SIRESS process.


The SADC Banking Association provides a regional banking leadership platform for strategic

direction and to promote and transform the whole of the region into a single economic bloc. Its

establishment was tied to the need for a federation of banking associations as the interface on

matters relating to regional financial integration in general and on the SADC Finance and


Investment Protocol specifically. Nkungula says Malawi backs SIRESS fully and banks in her

country are now able to focus on growing their client base not just among local citizens but further

afield too.


“We cannot work as an island; we have to work with each other because there’s a lot of crossborder

trading with neighbouring countries – it’s one of the main reasons why we joined SIRESS. We have

seen cross-border trade volume grow from 10% to around 30% and this means a greater reliance on

intra-regional banking,” she says.


Partnerships between banks and non-banks have grown, according to Nkungula. Through such

arrangements, banks are able to offer products beyond bill payments and remittance activities such

as savings, credit and insurance.


“The perception in Malawi that banks are only for the rich is changing, and technology and

innovation will help speed up this process,” says Nkungula. “We have ten banking groups and a

population of around 17 million. Of these only about 30% are bankable, it means a lot of banks

competing for a few customers.”


As new technology becomes more widely adopted, there will be a surge towards mobile banking.

“At the moment not every bank has mobile banking, but that’s the direction in which they have to

go,” says Nkungula.






One group of the population that has noted new mobile banking services are citizens with

disabilities. They can now access funds and move money without having to travel, often at great

difficulty, to an actual bank.

Stella Nkonya, the Executive Director of Malawi Human Rights for Girls with Disabilities, says the

new banking technologies have helped her organisation and its members.


“People with disabilities benefit from not waiting in bank queues or struggling to walk long

distances to a bank,” she says. “Mobile banking is simple and easy; handy and immediate.”

The cost of mobile cash transactions is also cheap. Nkonya adds: “If you want to move money using

other systems you have to pay a service fee but with mobile banking, there is no interest charged.”


Another community benefitting from an improvement in banking technology are village banking

groups. With banking groups, people pool their cash at weekly meetings and bank as a collective.


Mobile banking has allowed these groups to send their money through a trusted system. It has

helped promote the idea of joint accounts and community development through collective savings.


Nkungula from the Institute of Bankers knows that co-operation with national regulators is vital.

“The SADC banking system has linked us to so many countries as well as members,” she says.

“The local banks can’t work within just Malawi, the growth will be small. Their growth is quicker if

they link up with other banks in the region and even outside Africa.”


This is borne out by SADC banking statistics, which show that banking within the region fulfils a

key need of citizens and business. In 2015, for example, 55% of banking transactions were from

one Member State to another.


It means financial frontiersmen and women with technologically appropriate offerings that are

backed by SADC’s Finance and Investment Protocol are set to benefit and set to better serve their

clients too.

Mobile banking business is big in Malawi

Lyness Nkungula, Institute of Bankers Executive Director

SADC Protocol: In order to speed up growth, investment and employment in the SADC region, Member States in 2006

passed the SADC Protocol on Finance and Investment. The protocol aims to improve and facilitate the free movement of capital and labour, goods and services and to create appropriate institutions and mechanisms to achieve these objectives.