Saturday, July 13, 2024

NBM Plc introduces Share Purchase Loan

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National Bank of Malawi (NBM) plc has launched a share purchase loan product to enable customers to access loans and buy shares on the Malawi Stock Exchange (MSE).

Speaking during the launch on Tuesday, NBM Head of Retail Banking Division Oswin Kasunda said the new loan facility is designed to assist customers in fulfilling dreams of acquiring shares on the MSE through Stockbrokers Malawi Limited.

“The loan shall be secured by either existing shares that a customer already holds on the MSE or the purchased shares at 85 percent of the market value. This means that if the new shares being bought are to be used as collateral, the customer will contribute 15 percent, while the Bank will pay 85 percent of the purchase cost.”

“The loan will have a maximum repayment period of 36 months, a minimum loan amount of K250,000, and a maximum loan amount dependent on a customer’s capacity to repay subject to the loan repayment to income ratio not exceeding 30%,” said Kasunda.

He further indicated that it was established tthrough their market assessment and research, that many customers were looking for a facility that would allow them to buy shares on credit.

“However, the Stockbrokers Malawi Limited license does not allow it to lend money to clients. National Bank of Malawi plc is in the business of lending, hence addressing the challenge that investors or would-be investors face in buying shares on a cash basis,” said Kasunda.

In his remarks, Stockbrokers Malawi Limited Chief Executive Officer Noel Kadzakumanja said they hope the product will boost trading in the market.

“This loan is trying to address the problem that customers had, in the past, they were stuck because they didn’t have the cash to buy shares,” said Kadzakumanja.

The facility is open to customers whose regular income is paid directly into their NBM Bank plc account and will enable them to buy on any share counter.

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