Drive Digital Affordability: RBM’s Cost Cutting Blueprint for Malawi’s Business Ecosystem
Key Business Points
- The Reserve Bank of Malawi’s new 5-year strategy aims to lower digital transaction costs and improve network reliability in rural areas.
- Financial inclusion has doubled from 45% to 88% in a decade, with targets now set to reach 95-100% by 2030.
- Mobile money and bank transfer levies increased last November, adding to transaction costs alongside VAT and regulatory fees.
Malawi’s digital payments sector faces critical challenges that impact both consumers and businesses, with the Reserve Bank of Malawi rolling out a comprehensive five-year plan to address these concerns. The National Payments Systems Strategy focuses on reducing transaction costs and resolving network reliability issues that have frustrated users, particularly in rural communities where infrastructure remains underdeveloped.
Currently, digital transactions carry multiple layers of fees. The 2025/26 Mid-Year Budget Review introduced additional levies: a 0.05% bank transfer tax on senders and a 0.05% mobile money transfer tax on transactions exceeding K100,000. These stack onto existing charges including a 17.5% value-added tax and an MRA levy, all of which ultimately affect the cost of doing business for small enterprises and individuals.
Speaking at the strategy’s launch in Lilongwe, RBM Deputy Governor Kisu Simwaka acknowledged that high costs and network problems work against the government’s financial inclusion goals. "We need to address these issues because the whole idea is to ensure that many Malawians are financially included and that there is efficiency," he explained.
The strategy targets ambitious expansion, aiming to push financial inclusion from its current 88% of adults up to between 95% and 100% by 2030. This follows impressive growth over the past decade, during which the percentage almost doubled.
Industry representatives point to infrastructure as a major cost driver. Airtel Money’s managing director, Thokozani Sande, explained that the expense of maintaining payment systems directly impacts the fees passed on to customers. Data network availability and electricity reliability remain inconsistent in many rural areas, creating additional operational challenges for providers seeking to expand services.
Chris Sukasuka of TNM Mpamba highlighted that mobile money services have been instrumental in reaching the current 88% inclusion rate, but noted that rural expansion requires significant investment. Both operators and regulators are discussing solutions, recognizing that reliable, affordable digital payments are essential for broader economic participation.
Meanwhile, the Bankers’ Association of Malawi warns that recent policy changes could make most banking activities taxable, shifting more costs onto customers. The RBM’s 2025 National Payment Systems Report shows transaction volumes and values both increasing, suggesting continued growth in digital uptake despite cost concerns.
For Malawi’s entrepreneurs and business community, the developments present both opportunities and challenges. Greater financial inclusion typically drives economic activity, but high transaction costs can particularly burden small businesses operating on thin margins. The success of the new strategy may depend on achieving the right balance between expanding access and keeping services affordable for all users, mwachitsanzo, those running small kiosks or market businesses. Coordinating infrastructure improvements and addressing policy impacts will be essential steps toward making digital transactions a practical option nationwide.
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