The Malawi Enterprise Development Fund (Medf), formerly the National Economic Empowerment Fund (Neef), will resume loan disbursements in May despite carrying K187 billion in unpaid loans.
Medf board chairperson James Naphambo announced the move at a press briefing in Lilongwe on Friday, saying the institution has completed a comprehensive review and will roll out a structured, phased lending programme.
He said Medf has reverted to group‑based lending with a rigorous vetting system, requiring all beneficiary groups to undergo business training before accessing loans.
“The initial phase of disbursement will prioritise loans under the Constituency Development Fund [CDF] framework, alongside a tightly controlled rollout of business loans.
“This balanced approach is intended to ensure Medf delivers on its economic empowerment mandate while safeguarding long-term financial sustainability,” he said
Naphambo added that CDF loan disbursements will target women and youth across all constituencies, in line with government provisions.
He said implementation will be coordinated with the ministries of Finance, Local Government, Youth Development, and Gender and Social Welfare to ensure policy alignment, transparency, and effective delivery.
Medf chief executive officer Kayisi Sadala said lending will be gradual and tied to improvements in loan recovery.
He revealed that K187 billion remains unpaid, only K8 billion was collected during the 60-day ultimatum issued for repayments and the recovered funds have been used for operations and to pay suppliers.
“There are a lot of issues that forensic auditors need to examine. It may take a little longer; hence, the decision to restart lending. We have intensified efforts to collect money from those who owe us, in accordance with the laws that guide our operations. We are confident that we will recover the loans that were disbursed,” Sadala said.
Lending was suspended in September 2025 to allow a forensic audit.
Medf expects the audit to be completed within three months, with one month already elapsed.
On farm inputs worth over K15 billion lying idle in warehouses and nearing expiry, Sadala said the ban on their sale remains in place pending the forensic audit.
He said procurement issues surrounding the inputs have delayed a decision to dispose of them.
Public Accounts Committee of Parliament chairperson Steve Baba Malondera cautioned Medf to stick to its mandate when lending resumes next month.
The committee had earlier issued a stopping order on the auction of the inputs to recoup costs.
“They can now lend the inputs which they intended to auction, which we as a committee raised eyebrows. We wanted the proper process of disposal of inputs that were bought using Malawians’ money,” he said.
Centre for Social Accountability and Transparency executive director Willy Kambwandira said strong accountability mechanisms must be embedded as Medf resumes lending to safeguard public trust.
Priority areas should include transparent and merit-based loan allocation criteria with clear disclosure of eligibility requirements and beneficiary lists to prevent political or elite capture, he said.
Kambwandira also called for robust monitoring and evaluation systems to track loan use and outcomes, and accessible grievance redress mechanisms that allow borrowers to report concerns without fear of reprisal.
“Medf should commit to regular public reporting on disbursements, repayments and portfolio performance, subject to independent audit and parliamentary or oversight scrutiny. Integrating citizen engagement, particularly from marginalised groups, will be essential to ensure that the fund responds to real economic needs while upholding principles of fairness, transparency, and responsible stewardship of resources,” he said.
Medf has an entire loan portfolio of K240 billion, benefiting 377 460 Malawians as of December 2025, with K116 billion disbursed in 2025 alone.
Established on January 29 2005 through a presidential decree, the institution was originally named the Malawi Rural Development Fund (Mardef) before changing to Medf in 2014. In 2020 it was rebranded to Neef and recently rebranded back to Medf.
