By Edwin Mauluka
The National Advocacy Platform (NAP) has called for transparency in loan disbursements under the Malawi Enterprises Development Fund (MEDF).
The call follows MEDF’s announcement on Monday that it had started disbursing loans aimed at empowering Malawians and promoting sustainable enterprise development across various sectors of the economy.
“The commencement of loan disbursement is a welcome development because access to affordable finance remains a major challenge for many Malawians, especially youth, women, farmers and small-scale entrepreneurs,” said NAP chairperson Benedicto Kondowe.
“My call is for MEDF to ensure that the loans are distributed transparently, fairly and strictly on merit, targeting productive investments that create jobs, generate income and contribute to economic growth rather than serving political interests,” he said.
MEDF adopted its new name in April after rebranding from the National Economic Empowerment Fund (NEEF). The institution was established in 2014 during President Peter Mutharika’s first term following the merger of the Malawi Rural Development Fund (MARDEF) and the Youth Enterprise Development Fund (YEDEF).
Over the years, however, the institution has drifted from its original mandate of empowering ordinary and underserved Malawians, largely because of political interference under successive administrations. Beneficiaries were often politically connected individuals.
The practice is widely believed to have contributed to high loan default rates, threatening the institution’s long-term viability.
“There is a need for stronger business development support, including financial literacy, entrepreneurship training and mentorship to improve the success of funded enterprises,” Kondowe said.
“MEDF should strengthen monitoring and loan recovery systems while ensuring that loans are tied to viable business plans.”
Kondowe also called for the public disclosure of performance data to enhance accountability and restore public confidence.
“Zero default may not be realistic in any lending programme, but default rates can be significantly reduced through proper beneficiary screening, continuous support to borrowers and robust recovery mechanisms,” he said.
“Ultimately, MEDF should be viewed as a development finance institution, not a political tool. Its success should be measured by the number of sustainable businesses created, jobs generated, incomes improved, and loans successfully repaid and recycled to benefit more Malawians.”
In February this year, the National Assembly adopted a report by the Committee on Commissions, Statutory Corporations and State Enterprises recommending the enactment of a statutory framework for the institution.
“The committee is greatly concerned that NEEF’s [MEDF] establishment through a presidential directive rather than an Act of Parliament renders the institution highly vulnerable to political control and interference,” said committee chairperson Silvester Ayuba James.
“The weak legal foundation has contributed to NEEF [MEDF] being perceived as a political tool rather than a professional development finance institution, thereby eroding public confidence in its operations.”
The committee recommended transforming the institution into a statutory body with a clear mandate and governance structures to shield it from political interference and strengthen accountability.
According to James, the committee also observed that some Cabinet ministers and legislators were accessing the loans, undermining public trust.
It further recommended removing the institution from the Office of the President and Cabinet and placing it under the Ministry of Finance and Decentralisation.
In a statement announcing the commencement of loan disbursements, MEDF said it had reduced its loan portfolio from 26 products to nine consolidated products. These include Government Employees Loans, Youth Empowerment Loans, Women Empowerment Loans, Men Empowerment Loans, Agricultural Production Loans, Cooperative and Industrialisation Loans, General Trading Loans, Asset Financing Loans and Micro-insurance Loans.
“In addition, MEDF is promoting the Order Finance Loan product under Asset Financing loans, targeting individuals, partnerships and private limited companies requiring short-term financing to execute business contracts and supply orders,” the statement reads in part.
“The facility is designed to provide working capital for timely contract execution and business growth.”
The Fund also said it would focus on group lending to strengthen collateral support and minimise default risks, although individual applications would still be accepted.
In the 2026/2027 financial year, MEDF plans to disburse MK100 billion across the nine loan categories.
The programme will be implemented in collaboration with five government ministries: the Ministry of Finance, Economic Planning and Decentralisation; Ministry of Local Government and Rural Development; Ministry of Youth, Sports and Culture; Ministry of Gender, Children, Disability and Social Welfare; and the Ministry of Agriculture, Irrigation and Water Development.
“This collaborative approach is intended to strengthen due diligence, enhance accountability and ensure effective programme implementation,” MEDF said.
MEDF is a government-owned microfinance institution registered under the Companies Act of 2013. Its stated objective is to economically empower ordinary and underserved Malawians, particularly women, youth and persons with disabilities.
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