While Malawi’s commercial banks continue to post record high profits, financial experts are raising concerns over the disconnect between the financial sector’s performance and the economic welfare of ordinary citizens.

Recent financial reports reveal that National Bank of Malawi (NBM) plc and NBS Bank recorded after-tax profits of K100 billion and K73 billion respectively for the financial year ending 2024. This marks a significant jump from 2023, when NBM posted K72 billion and NBS reported K32.6 billion in profits.

Despite this growth, entrepreneurship expert Richard Selemani argues that the impressive financial gains do not translate into real benefits for the general public. He blames what he describes as “exorbitant charges” and “hidden costs” for eroding consumer trust and value.

"Every time you do a transaction they deduct almost K500. By the end of the day if all Malawians that have got an account make transactions, you find that the banks are making a lot of money within a day," said Selemani.

Echoing similar concerns, economist Edward Masoambeta emphasized the need for deliberate policy reforms to ensure the banking sector’s growth also uplifts customers.

Said Masoambeta: "You don't get anything by keeping the money in the bank and the lending rates when you want to get a loan from the bank is very huge, so saving does not give people any advantage." 

The Bankers Association of Malawi (BAM) has acknowledged the sector's strong financial performance. However, Chief Executive Officer Lynes Nkungula admits that persistent challenges remain.

"It's essential that profitability go hand in hand with enhanced customer experience, broader financial access and innovative services tailored to national priorities such as generation of forex, agriculture transformation and digital empowerment," said Nkungula.

Meanwhile, Malawi’s broader economy is under severe strain, grappling with a range of shocks including inflation, currency instability, and rising unemployment. These challenges have made it increasingly difficult for ordinary Malawians to access affordable credit or realize meaningful returns on their savings.