FDH Financial Holdings Limited Chief Executive Officer Thom Mpinganjira has spoken on lack of a national identification system in the country has created room for increased loan defaults.

He says this is causing most commercial banks in the country to lose huge sums of money with FDH alone losing K1.7 billion in unpaid debts.

“When FDH bank started, we said our focus should be small and medium enterprises. We wanted to help our fellow Malawians who have for a long time been suffering. If you saw the results of FDH Bank for 2013, we had to write off K1.7 billion,” he said.

Mpinganjira looking a little bit off recently in an interview with Capital fm said this is as a result of poor systems currently being used by banks to trace their customers in the absence of the national identification system.

“The absence of the ID system in Malawi is terrible because what it means is that a person can go to one bank using one name and then go to another bank using another name. You can never know because our systems allows it,” he said.

He therefore warned that the current situation would force banks to change their position when providing financing especially to Small and Medium enterprises in the country.

FDH was established six years ago and boasts of more than 13 service centres across the country.