Executive summary
Digital and Financial Literacy Index Scores
Malawians possess low levels of digital and financial literacy with significant room for growth in both areas.
In the Digital and Financial Literacy (DFL) Index scores, Malawians achieved a mean score of 16.9 points out of a possible 52 points, indicating a need for enhanced digitalisation and financial competencies. While the awareness of financial safety and benefits of Digital Financial Services (DFS) is higher than expected, the application of this knowledge is lagging. This is particularly evident in the low uptake of advanced digital devices and the limited engagement in complex DFS activities. 27.4% of respondents scored in the low range, while a mere 0.2% achieved scores in the high range. The majority (61.3%) fell into the moderate category, and 11.1% received an above-average score.
Demographics play a critical role in the scores. Urban residents, individuals under 45 years of age, those with higher education attainment, males, and higher-income individuals outperform their counterparts. The most striking difference is observed in education levels—postgraduates averaged a score of 36.4, while those without formal education averaged only 11.4.
An examination of the DFL index scores by gender and location uncovers significant disparities as well. Rural women register the lowest scores, contributing the most to the low end of the index. Meanwhile, although urban women score lower than urban men, the majority fall into the moderate and above-average categories.
The DFL findings paint a clear picture of the distinct need for targeted interventions to improve inclusivity and literacy, particularly among rural women and those without formal education.
Digitalisation
The digitalisation landscape in Malawi is marked by low usage patterns and proficiencies. The majority of Malawians have access to and regularly use feature phones, with 71.2% of adults owning one. Access to other digital devices such as smartphones, tablets, and computers is limited, with only 35.9% of adults owning a smartphone. The frequency of device usage is moderate, with 73.1% of feature phone owners and 72.0% of smartphone owners using their devices multiple times a day. However, only 44.0% of computer or laptop owners use their devices with the same frequency.
Internet usage in Malawi is comparable to similar countries in sub-Saharan Africa, with only 50.5% of adults reporting having ever accessed the internet, and 43.4% of adults reporting having used the internet in the past 3 months. Global Findex data estimates this figure at 38.9% in Zambia and 31.6% in Zimbabwe.
According to this survey, most Malawians access the internet via their phones, using mobile data.
Malawians report being more likely to engage in low-complexity digital activities such as sending or receiving USSD messages (78.3%) or setting up alarms (56.9%). High-complexity tasks that typically require a laptop or computer, like using formulas in spreadsheets (7.4%) or writing programming language (1.1%), are less common.
In general, Malawians are proactive about online safety, with 86.1% reporting that they take steps to keep their information safe online. However, only 27.8% of Malawians with a smartphone or laptop have virus protection on their devices, and 45.7% of internet users have the same password across multiple online accounts.
Financial competencies
Financial competencies in Malawi are low and characterised by high levels of cash use. Notably, the payment services used by Malawians include a bank or mobile money account (69.9%), a digital/electronic/mobile wallet (61.9%), a payment card associated specifically with a current account only (8.6%), or cryptocurrency (0.9%). The prevalence of mobile accounts vis-a-vis traditional bank accounts is likely due to the popularity and accessibility of mobile money platforms like TNM Mpamba and Airtel Money.
Demographic factors such as location (urban-rural), income, and educational attainment have a significant influence on digitalisation outcomes and financial inclusion. The most significant differences were observed among those with varying levels of educational attainment and income.
The most popular methods for engaging with financial services—checking account balance and making deposits or withdrawals—are through USSD, agent banking, bank branches, app/website, and ATMs. Despite a high percentage of Malawians using a financial service or product, they still heavily rely on cash for most day-to-day transactions. This includes paying for groceries, household utility bills, and meals out.
Remittances also play a significant role in the Malawian financial landscape. More Malawians are likely to have received money from abroad (18.1%) than sent it themselves (1.8%). This reflects the low-income status of Malawi, where citizens are more likely to receive financial assistance from relatives or friends living abroad in higher-income countries.
Digital financial competencies
Malawians have positive perceptions and attitudes towards digital financial services (DFS). A significant share of respondents believe DFS is essential for remittances, makes government payments easier, helps reduce costs and is not risky. More specifically, 54.2% believe DFS will soon replace cash in Malawi, and 64.2% believe it is regulated in a manner similar to banks.
Despite these positive perceptions, there is a missed opportunity for improved financial control and budgeting. While a significant portion of respondents check their mobile money balance before making payments (87.4%), a majority (80.1%) do not use a banking app or online money management tool to monitor their spending and saving.
The overall uptake of complex DFS products, such as digital loans and insurance, is relatively low: 21.2% of respondents have taken out a digital loan and only 1.9% an insurance policy online or via an app. Uptake also varies sharply across demographic groups. Women are less likely than men to use complex DFS. For example, 19.4% of women have taken a digital loan, compared with 23.1% of men. Younger adults are more likely than older adults (22.6% of under-45s versus 16.3% of those aged 45 and over), potentially due to greater familiarity with technology. Uptake rises steeply with education, from 12.5% among those with no formal education to 38.9% among those with TVET or university qualifications, as well as with income. Notably, rural adults are more likely than urban adults to have taken a digital loan (21.9% versus 18.2%), possibly because limited access to traditional financial services in rural areas makes digital credit a valuable alternative.
Desired outcomes
Malawians generally reported positive experiences with DFS. A majority of more than three-quarters (77.0%) noted that DFS helped them save money by reducing fees or other costs. Additionally, 79.9% found it easier to manage their finances, and 78.9% found it easier to track their spending. Fraud is the one area of real concern, though its scale is uncertain. 29.1%, about one third of respondents, confirmed that they had never lost money to online scams, phishing, or similar incidents. This could point to a vulnerability to digital fraud among DFS users in Malawi.
Despite the increasing acceptance of DFS, cash still dominates: amongst respondents 95.6% paid in cash the last time they dined out and 57.9% paid in cash for their last utility bill. Still, exclusive use of cash is not common, with only 5.5% of Malawians relying solely on cash. Within this group, over half (53.7%) prefer cash over other payment methods, 18.3% lack confidence in their reading and writing abilities to use DFS, and 9.8% lack the necessary digital devices to access DFS.
Regarding DFS safety, Malawians exhibited moderate vulnerability to phishing attacks. While 73.2% chose safe options when responding to a phishing vignette in the survey (reporting to their bank (66.9%) or deleting/ignoring (6.3%)), 22.4% opted to "Follow the Link." Following the link was more common among younger adults (25.6% of those aged 18 to 24, against 16.9% of those aged 45 and over) and among women (23.9% versus 20.8% of men). By education the risk fell on those with primary or secondary schooling rather than those with no formal education (14.3%) or with TVET or university qualifications (16.3%), and it was higher among lower-income respondents (24.3%) than higher-income ones (11.8%), suggesting that financial pressure may increase susceptibility to scams.
