Malawi SMEs: Leveraging the COMESA Payment Platform for Growth and Efficiency
Key Business Points
- SMEs can now trade across Malawi’s borders using local currency through Comesa’s new digital payment platform
- The system reduces costs and foreign exchange risks for cross-border traders, particularly women retailers
- Local banks including TNM Mpamba, FDH Bank, and Finca Malawi are already integrated into the platform
The Reserve Bank of Malawi has introduced a new digital payment and settlement system through the Common Market for Eastern and Southern Africa, allowing small and medium enterprises to conduct cross-border trade using local currencies. The system was officially launched at a workshop in Lilongwe, bringing together key stakeholders from the banking sector and business community.
RBM Deputy Governor for Operations Kisu Simwaka emphasized that the platform addresses a critical challenge for cross-border traders, particularly those operating as small retailers near Malawi’s borders with Zambia and other neighbouring countries. The system enables real-time transactions in local currency, eliminating the need for costly forex conversions and reducing transaction costs.
Comesa Clearing House executive secretary Jedidiah Ndebele explained that the digital payment platform was specifically designed to cater to SMEs after recognizing that these businesses drive economic activity throughout the region but had been excluded from existing payment infrastructure. The platform creates a secure channel for transactions, removing the previous risks associated with carrying cash during cross-border trade.
The system will initially operate between Malawi and Zambia as part of a pilot phase before expanding to all 21 Comesa member states this year. Early adopters in Malawi include major financial institutions such as TNM Mpamba for mobile money services, FDH Bank, and Finca Malawi, providing multiple channels for businesses to participate.
Banking Association of Malawi president Phillip Madinga, who also serves as Standard Bank Malawi chief executive, identified significant opportunities for SMEs in importing processing equipment using local currencies. This is particularly relevant for agro-processing businesses that need machinery to add value to agricultural products. The reduced settlement costs create competitive advantages for Malawian businesses.
The platform integrates banks, non-bank financial institutions, fintech companies, and mobile-money operators, creating a comprehensive ecosystem for cross-border transactions. Comesa chief operating officer Jonathan Pinifolo highlighted that the system eliminates dependency on hard currencies for cross-border settlements, making trade more accessible and inclusive for small businesses.
Economic data supports the relevance of this development. The World Bank’s Global Findex report shows that 61 percent of adults in developing economies now engage in digital payments, with sub-Saharan Africa experiencing the fastest growth in this area. Simwaka noted that this infrastructure positions Malawi advantageously as digital payment adoption continues to rise across the continent.
For Malawi’s SME sector, particularly women traders who previously faced safety risks carrying cash during cross-border transactions, the new system offers practical benefits. Comesa Secretary General Chileshe Mpundu Kapwepwe has emphasized that the platform provides dignity and safety for female traders while ensuring faster, more reliable payments.
The digital payment platform represents a significant opportunity for Malawi’s small businesses to expand into regional markets with reduced costs and improved security. By enabling transactions in local currency, businesses can better manage [singular currency] risks while accessing new markets and suppliers across the Comesa region.
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