The Financial Intelligence Authority (FIA) has sounded the alarm over the increasing complexity of money laundering schemes in Malawi, warning that criminals are exploiting both old and new avenues to disguise illicit funds and undermine the financial system.

In its latest Money Laundering Trends and Typologies Report, covering July 2020 to March 2022 and released in February 2025, FIA reveals a rise in advanced money laundering techniques, particularly the layering of funds.

This is a method used to conceal the criminal origin of money by moving it through multiple accounts and transactions, especially within banks.

The authority, in a statement accompanying the release of the report, says that non-governmental organisations (NGOs) have also been used to defraud people.

It says fraudsters are luring individuals into opening accounts or using third-party accounts with the intention of exploiting them for fraudulent activities and abusing exchange control regulations.

According to the report, the layering technique involves transferring large sums of money through numerous business and personal accounts in a manner that does not align with legitimate business activities.

Among the novel tactics unearthed, FIA highlights the misuse of NGOs as a major new trend.

Fraudsters, the report reveals, are capitalising on the public’s trust in NGOs by encouraging people to deposit money with promises of lucrative benefits, ranging from agricultural farm inputs to education bursaries.

“The public should be wary of any suspicious NGO promising unrealistic benefits in exchange for upfront payments,” FIA cautions in the report.

Another trend highlighted in the report involves cross-border traders misusing automated teller machine (ATM) cards to withdraw large amounts of foreign currency from machines outside Malawi.

“We have further noted that some individuals are abusing the facility by using ATM cards belonging to various individuals to withdraw foreign currency outside Malawi, and in the process, violating some foreign currency exchange controls,” the report states.

FIA further says that while it is common for cross-border traders to carry plastic money and access funds from ATMs as foreign currency in bordering countries, even non-cross-border traders are engaging in the same practice to benefit from competitive rates of foreign currencies over the Malawi Kwacha.

“The practice is becoming a conduit for illegal forex externalisation and terrorist financing, as not everyone accessing foreign currency in bordering countries is doing so for cross-border trading purposes,” the report continues.

Additionally, FIA has identified cases where traders use multiple ATM cards belonging to different individuals, further complicating efforts to track the origin and purpose of the funds.

FIA has