National Economic Empowerment Fund (Neef), now rebranded to Malawi Enterprise Development Fund (Medf), recorded an after‑tax loss of K1.4 billion midway through the current financial year as loan collection rates deteriorated, the 2026 Annual Economic Report shows.
The fund’s collection rate stands at 52 percent, down from 68.9 percent as of September 2025. This is against a target of 85 percent, meaning the institution continues facing pressure on loan recoveries.
According to the 2026 Annual Economic Report, the fund still anticipates a profit after tax of K502 million as of the end of this month, which is the end of the current fiscal year.
However, this is the third time for the fund to generate losses within a five-year period amid a sloppy fiscal performance, according to our analysis of audited accounts of the institution.
Our analysis show that in 2022, the institution registered an after-tax loss of K13.5 billion followed by another K4.9 billion loss the following year.
But in 2024, the institution registered a profit after tax of K814 million and K407 million in the subsequent fiscal year.
Regardless of the mixed fortunes, the institution has, however, registered certain gains such as its gross loan portfolio at K30.62 billion, exceeding a budgeted K23.08 billion by 33 percent.
Reads part of the report: “This strong performance was mainly driven by interest income, which grew to K21.93 billion.
“This represented 27 percent above budget and 117 percent higher than the same period in the previous year. This is largely due to growth in the loan book during the prior farming season.”
Other notable gains include an increase in the net loan portfolio from K142.30 billion recorded in March 2025 to K196 billion as of September 2025.
Liquidity also improved as of September 2025, with the current ratio rising to 4.37:1, and is further anticipated to strengthen further to 5.09:1 by March 2026.
“This strong liquidity position is mainly attributed to government equity injections and the rollout of the Ministry of Agriculture irrigation programme,” further reads the report.
In 2024, it emerged that the Fund had written off K11.3 billion of loans obtained between 2005 and 2018 following failure by beneficiaries to repay.
Prior to that, a 2020 audit by the Central Internal Audit Unit of government found that some people allegedly defrauded the Fund K53.2 billion through loan disbursements to doubtful beneficiaries.
Centre for Social Accountability and Transparency executive director Willy Kambwandira said the performance of the fund is not surprising due to numerous factors.
Kambwandira attributed the losses to long-standing concerns about weak governance, politically exposed lending and poor loan recovery systems.
“When a public empowerment fund repeatedly posts losses while reports persist about politically connected individual’s access and default on loans, it signals institutional capture and a breakdown in accountability,” said Kambwandira.
“This is no longer a performance fluctuation. It is a systemic governance failure that risks turning the institution into a fiscal burden on taxpayers rather than a vehicle for genuine economic empowerment.”
Governance commentator Undule Mwakasungula in a separate written response on Wednesday said the fund’s persistent losses are a governance and accountability issue that requires immediate action.
Mwakasungula said such an institution records repeated losses, it raises so many questions about the purposes of such a lending institution.
He said: “The Fund was created to empower Malawians economically, especially small-scale entrepreneurs, youth, women, and rural businesses that struggle to access financing from commercial banks. If the institution is making losses of this magnitude, it means its ability to continue supporting vulnerable and deserving Malawians is at risk.”
What is even more troubling, according to Mwakasungula, are allegations that politically connected individuals have been benefiting from Medf’s loans and purportedly failing to repay them.
A fortnight ago, the Parliamentary Committee on Commissions and Statutory Corporations reported systemic political abuse and financial mismanagement at Medf, with loans targeted underprivileged Malawians benefitting politicians and individuals with connections.
Mwakasungula described the situation as an anomaly which must be corrected without compromise.
“Persistent losses may also point to weak credit assessment systems, poor loan recovery mechanisms, political interference, and lack of strong oversight. Any empowerment fund must operate on clear professional standards, with transparency and accountability,” Mwakasungula said.
“There is an urgent need for an independent audit and a transparent review of Medf’s operations. We must understand that economic empowerment must be sustainable. If Neef continues to record losses, then it is failing the very people it was meant to uplift.”
Neef spokesperson Elizabeth Hara on Wednesday said she would revert. Subsequent follow-ups on Thursday and Friday proved futile.
Established on January 29 2005 through a presidential decree, the institution was initially named Malawi Rural Development Fund (Mardef) before being rebranded as Medf in 2014 and later renamed Neef in 2020.
Its board of directors in February 2026 approved that it should revert to Medf.
Records show that 377 460 Malawians had obtained loans from the institution as of December 2025, a sharp increase from 98 417 borrowers recorded in the 2021/22 financial year.
