The piece “FDH Bank takes lead in supporting artisanal small-scale mining sector” featured below was initially published in Malawi’s Mining Review Issue Number 20 2014 that was circulated in December 2014. This is the final edition for 2014.

The full edition of the Mining Review can be read here: Mining Review No. 20 December 2014

To learn more about this quarterly publication, edited by Marcel Chimwala, read the post about the “Voice of the mineral sector in Malawi”.

FDH Bank takes lead in supporting artisanal small-scale mining sector

‘FDH Bank wants Small scale miners to grow with the economy’

Malawi’s fastest growing bank, FDH Bank, says it is determined to uplift the lives of small-scale mining communities through a number of programmes that it is implementing in partnership with the Government and other stakeholders.

FDH Bank Managing Director Phillip Madinga says as reflected in its motto, “Grow With Us,” the Bank, decided to support the small-scale and artisanal mining subsector after noting that the subsector has not been receiving adequate support despite its huge potential to create employment and alleviate poverty among rural communities.

Our Brand promise, Grow With Us resonates very well with our focus to support small businesses in the SME sector – a sector which the ASM segment belongs to. It is because of this that we want to take a leading role in unlocking opportunities for the ASM through our various initiatives like running financial literacy programmes for the players in this sector, which enables miners in this sector to access finance easily from both local and international banks. We believe that if we can nurture this sector, we can also link players from the ASM sector to international markets,

says Madinga, whose bank was awarded two prestigious awards in 2014 namely the Best Retail Bank in Malawi and Fastest Growing Retail Bank in Malawi by the Global Banking and Finance Review.

Early this year, FDH Bank participated in the Mining Indaba - an event held annually in Cape Town, South Africa.

At this Indaba, Madinga says, FDH noted with keen interest that Malawi’s Artisanal Small Scale Mining sector faces similar challenges to those that were tackled at the event, which prompted FDH Bank to engage the Ministry of Mining to agree possible options of dealing with the challenges.

Consequently, FDH Bank signed a memorandum of understanding (MOU) with the Ministry of Natural Resources, Energy and Mining that establishes a business relationship between the two parties to provide capacity building and provision of access to finance as well as technical support in the promotion of artisanal and small-scale mining development in the country.

We signed this MOU because we recognise that establishment of a business relationship and provision of access to investment funds or technical support towards Small and Medium Enterprises (SME’s) in the mining sector can assist sustainable development in the livelihood of artisanal and small scale miners and the nation as a whole,

says Madinga.

He says the MOU was concluded with the aim of promoting and empowering Artisanal and Small Scale Miners in Malawi given the significant role that mining and in particular this ASM sector plays in contributing to the country’s GDP.

FDH role covers various initiatives, which include:

Capacity building - this covers Support of Artisanal and Women in Mining Workshop; assisting with Exhibition of minerals produced by ASM and Participation at the oncoming Cape Town Mining Indaba and Excursion to Key mineral sites.

Access to finance - this relates to ASM having access to FDH Quick loans and Trade Finance Lines as well as Opening of special Foreign Currency Dominated Accounts (FCDA) for the ASMs

Technical support - FDH through its SME Clinics and Suites would provide special business management techniques, cash flow management techniques and financial literacy workshops.

Promotion of Investments – this would be done through the Exhibition of ASM Malawi minerals and Participation at Cape Town Mining Indaba to market Malawi Mining Wealth.

As part of its programme of activities for artisanal and small-scale mining development, FDH Bank already conducted on-site financial literacy programs for some of the ASM players.

We have also already identified various sites where we intend (in partnership with several other stakeholders) to establish organized markets and places where they can polish their hard earned minerals. At FDH Bank, we want to encourage the ASMs to indeed not only Grow With Us, but also grow with the economy. No one can dispute that there is no other bank like us,

says Madinga, who was among the key speakers at the Symposium for the formulation of the National Artisanal and Small Scale Mining Policy.

FDH Bank played an active role to organise the first ever Symposium for the formulation of the ASM Policy that was held in Lilongwe in November alongside the Government, the World Bank and the European Union through the Mining Governance and Growth Support Project. Other financiers of the symposium included the United Nations Development Programme and a Washington-based NGO, PACT.

In addition, FDH Bank is committed to finance sensitization programs on small-scale mining through television and radio programmes from 2014 to 2015.

Being local enables us to understand better the development needs of this country and indeed the needs of our Government. This is why we are inspired to finance these local initiatives,

says Madinga.

He also says FDH’s aspiration as a bank is to become a leader on the Malawi market as well as to broaden reach to Southern Africa region and this is gradually turning into a reality as the Bank which started on a humble scale with only its flagship branch, Umoyo House Branch in Blantyre in 2007 has now expanded its presence across the country in all the regions and now boasts of 14 service centres.

The Bank has also been innovative on the Malawi market introducing several new products and services with the most recent one being Bancassurance.

Our bancassurance offering is complementing our lending product bouquet from which we believe the artisanal and small scale miners may benefit from through access to insurance for any loans that they will access from FDH Bank,

says Madinga.

FDH Bank, which provides a full range of commercial banking services, is one of the greatest supporters of small and medium enterprises in Malawi and has supported the development of major projects with the Malawi Government, construction industry, civil servants, retail chain stores and other private companies through its fast and flexible service delivery.

As a Bank, we are in this engagement because we realize that the Banking sector plays a crucial role in ASM development. In countries such as South Africa, the banking industry has actually flourished because of a resilient mining sector. Therefore, the success of the mining industry in most African countries, including Malawi, is very much dependent on how supportive the banking industry and how strong the banking industry is. FDH Bank strongly believes that in Malawi we have a strong banking industry that is keen to support the mining sector and in particular the ASM segment. We are proud to take the lead in supporting the ASM subsector,

says Madinga.

As a responsible member of the private sector, FDH Bank calls upon all stakeholders in mining to uphold the rights of all, especially the rights of children in the course of duty and to refrain from child labour in the mines.

We must ensure that our children have access to education so that they can have a bright future. Let us actively integrate the rights of children in our businesses. As a Bank we aim to make a real difference for our stakeholders – thus, our shareholders, our customers, our staff and our communities. Therefore our support for this sector will also include special CSR initiatives that deal with various challenges that this sector faces – these include health and sanitation issues, Child Labor challenges amongst many issues we have identified,

says Madinga.