What is the Malawi Agricultural and Industrial Investment Corporation Plc (MAIIC)?
MAIIC is a private sector-led development finance entity that has been established to bridge the financing gap in Malawi as a way of spearheading private sector development.
What is the target market for MAIIC?
MAIIC is here to help businesses (both existing and start-ups) with commercially viable projects mostly in the following market segments:
- SMEs (start-ups and established)
Is MAIIC a bank?
No MAIIC is not a bank. It is will support businesses through the existing banks and financial institutions. Therefore, MAIIC does not offer bank accounts such a current accounts or savings accounts to individuals or businesses and companies.
What type of financing does MAIIC offer?
MAIIC offers mostly medium to long term project finance in the form of loans, debt, equity, guarantees etc.
Does MAIIC offer grants?
No for the time being. However, MAIIC is in the process of identifying co-operating partners who may be able to provide grant funding for qualifying projects.
How much can my business apply for?
There are product, sectoral and risk limits for financing. Each investment proposal is reviewed based on its commercial viability and developmental impact to the nation including job creation. In almost all cases, MAIIC will collaborate with other banks and financial institutions to increase financing capacity in cases where a project is bigger than what MAIIC can handle.
What are your interest rates?
As a non-deposit taking entity MAIIC will aim to keep its interest rates and charges competitive meaning the entity has to cover its costs at all times for its sustainability. Because, it works as a partner of the financial sector in Malawi, MAIIC prices its products and services is a way that does not undermine the sector as a whole.
What level of security do you support?
With loans, MAIIC will take full, partial or no security depending on the project. The security can either be from assets in the business to guarantees. MAIIC will also make it possible for bank and other financial institutions to provide funding to businesses by providing risk-reduction mechanisms which may include collateral and insurance arrangement with insurance companies.
How do I apply for funding?
The first thing to do before applying for funding is to check whether your business is eligible for investment. Once this has been established you can submit your proposal to MAIIC either online or through its mailing address.
Do I need a business plan and financials to apply online?
Applying online with all the required documents will help speed your application. You can save progress on your application and come back later on should you need to do so. However, if this is an issue you can submit just the online application form and send in the necessary documents to us at a later date.
What are the most common requirements for a funding proposal?
The following documents are mandatory: project synopsis detailing; type of project, your financial contribution, other financial contributions, planning permission(s), detailed cost breakdown of the project, details of the project’s revenues, demonstrating loan repayments. In addition to these, you also need the following: a financial analysis, market analysis, technical aspects, risk assessment, organization and management details, and environmental, social and gender issues, among other aspects of the project.
This information can be developed with the help of consultants which MAIIC has identified. The cost of doing these investment appraisals will be borne by the project promoter although in some cases MAIIC may provide loan funding for the project preparation stage.
How long will my application take to process?
This depends on the how soon MAIIC receives all the necessary documentation and the size and complexity of the finance you need.
Can I apply for further finance?
Absolutely. MAIIC’s portfolio team works with business promoters to help provide follow-on funding when required. This means a company could secure several rounds of finance from MAIIC over a period of time.
How does MAIIC differ with other financial institutions?
MAIIC occupies a special position in the financial sector in Malawi. It will provide long-term project financing and will act as an intermediary and conduit of financing for local and international financial institutions unable to lend directly to businesses in Malawi.
Does MAIIC compete with the existing banks and financial institutions in Malawi?
No, MAIIC does not compete with the existing financial intermediaries. Instead, it will deliver its products and services in collaboration with them. This flexible operating model aligns well with its role as key “bridge” in building partnerships between the public and private sectors. In all cases, MAIIC will disburse funding through cooperating banks and financial institutions. Names of these entities will be announced from time to time. Applicants for funding do not have to leave their banks or financial institutions to get funding from MAIIC unless their banks have clearly indicated unwillingness to fund them alongside MAIIC. In this case, another partner bank or banks will be recommended.
This collaboration with banks and other financial institutions will include MAIIC appointing some of them to be MAIIC regional representatives so that country as a whole is reached. It is planned that there will regional representation in the northern, central, eastern and southern parts of the country.
What is the procedure for processing funding requests?
On receipt of the project proposal, a decision is made on whether the project is eligible for funding or not. The applicant is then notified of the decision. Once the project is eligible for funding, a detailed appraisal is carried out. After the detailed appraisal, MAIIC makes a decision and the client is notified accordingly. MAIIC will commence disbursement upon fulfilment of the disbursement conditions agreed with the client.
Where can I get help for project preparation, business plan development and analysis?
MAIIC will over time select local and international consultants that will be recommended to project promoters depending on expertise and performance. Contractual arrangement with these consultants will be left to individual project promoters.
What is MAIIC’s primary focus?
MAIIC’s primary focus is to spearhead private sector development in Malawi thereby improving the well-being of the citizens of Malawi through profitable investments and projects. Its activities achieve that aim by promoting agriculture, SMEs, enterprises and infrastructure.
How is MAIIC regulated?
MAIIC will be self-regulated development finance entity subscribing, through its board of directors and shareholders, to the principles of good corporate governance. MAIIC will always work very closely with the Association of African Development Finance Institutions (ADFI) which has issued best practice guidelines for DFIs. Once fully operational and has good track record, MAIIC will seek a listing on the Malawi Stock Exchange and later an international credit rating to enhance its investor appeal and corporate image.