Transunion Malawi Champions Tech for Financial Inclusion and Economic Growth

The Role of Technology in Financial Inclusion

Technology has emerged as a critical driver in enhancing financial inclusion and economic mobility, particularly in developing economies like Malawi. A local financial firm, TransUnion Malawi, highlights the transformative potential of technology in enabling broader access to financial services.

The Country Director of TransUnion Malawi, Dumisani Kadango, emphasized that while progress has been made, significant challenges remain in ensuring comprehensive financial services reach all segments of the population. He pointed out that these challenges are hindering the pace of financial inclusion, which is essential for sustainable economic development.

Kadango stressed that when individuals have access to affordable, appropriate, and timely financial products and services, they are better equipped to save, invest, manage risks, and improve their overall quality of life. This empowerment is crucial not only for individual well-being but also for the broader economic growth of the nation.

According to a 2023 FinScope Consumer Survey, 88 percent of Malawian adults are considered financially included, meaning they have access to and actively use formal or informal financial products and services. This marks a significant improvement from 2014, when only 51 percent of adults were financially included.

Formal financial inclusion, which involves the use of services provided by regulated institutions such as banks, microfinance providers, and mobile money operators, has increased from 34 percent in 2014 to approximately 74 percent today. Notably, the most rapid growth has been observed in the use of mobile money and other non-bank channels, which rose from 18 percent to 73 percent over the same period.

Despite this progress, deeper issues persist. Only 13 percent of adults hold traditional bank accounts, down from 27 percent in 2014. This suggests that while mobile channels have significantly expanded access, reliance on full-service banking remains limited. This raises concerns about savings, credit availability, and overall financial resilience among the population.

One of the primary barriers to formal financial inclusion is the lack of traditional credit information. Conventional lending practices often require payslips, collateral, and credit histories—criteria that many Malawians, especially those in the informal sector and rural areas, cannot meet. However, the emergence of alternative data sources, such as mobile money transaction logs, airtime purchases, and utility payments, offers a promising solution. These digital footprints allow lenders to assess financial reliability more effectively and extend credit responsibly to underserved communities.

TransUnion Malawi has taken steps to support this shift by leveraging data-driven innovation. Through the responsible use of alternative data, scoring solutions, and deep consumer insights, the organization collaborates with partners across the financial ecosystem to help unlock access for those historically excluded, without compromising financial stability.

This approach is not just about approving more loans; it is about promoting responsible lending. When implemented correctly, data-driven credit scoring reduces risk for lenders while creating opportunities for those previously excluded from the formal financial system.

The Impact of Digital Platforms

Mobile phones have become a gateway to financial inclusion in Malawi. Digital platforms are breaking down longstanding barriers and reshaping how individuals engage with financial services. For instance, a young entrepreneur in Lilongwe can obtain a microloan through a mobile app, unlocking capital that was previously out of reach. Similarly, a smallholder farmer in Dedza can access weather-indexed crop insurance via SMS, providing protection against climate-related risks. Meanwhile, a student in Zomba can use digital savings platforms to manage finances, monitor spending, and build a financial footprint that supports future borrowing.

These digital tools are more than convenient; they are transformative. Reliable, anytime-anywhere access to financial services through digital platforms reduces the physical, bureaucratic, and psychological barriers that have long excluded many from the formal financial system. As a result, technology continues to play a pivotal role in driving financial inclusion and fostering economic mobility in Malawi.