PortHerald Press

The Deposit Insurance Corporation (DIC) says its insurance fund has grown to K20 billion as of December 2025, strengthening its capacity to protect depositors and support financial stability in Malawi.

Speaking during an engagement meeting with members of the Association of Business Journalists in Mzuzu on Friday day, DIC Operations Manager Lowina Mwasigala said the corporation's primary mandate is to ensure public confidence in the banking sector by guaranteeing reimbursement of insured deposits when a bank fails.

Mwasigala said the institution has made significant progress since its establishment, with the fund expected to grow further to K174 billion in the coming years. She explained that the projected growth will enable the corporation to reimburse depositors even in the event that one of the country's largest banks collapses.

Currently, she said, the available fund would be sufficient to compensate depositors of the smallest bank in Malawi if it were to fail. However, she noted that DIC may face challenges in handling the failure of a larger bank using the current fund alone, adding that the law allows the corporation to borrow from the Reserve Bank of Malawi when necessary to ensure depositors are paid.

Despite the progress, Mwasigala expressed concern over a decline in the number of depositors covered by the scheme, from an initial target of 2.9 million to the current 2.7 million. She attributed the trend to possible reductions in disposable incomes and growing preference among some people to keep money outside formal banking channels. She therefore urged Malawians to use licensed financial institutions and emphasized the need for improved financial literacy to counter misconceptions about banking services.

Meanwhile, participantJackson Sichali commended DIC for engaging the media, saying journalists have a crucial role in educating the public about the importance of saving money in licensed banks.

He said the knowledge gained from the interaction will help journalists raise awareness on financial security and the benefits of deposit insurance during times of uncertainty.

(MZUZU)

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