Neef yet to recover K6.1 billion loans


National Economic Empowerment Fund (Neef) has only recovered K400 million out of the K6.5 billion that was disbursed nationwide when it was operating as Malawi Enterprise Development Fund (Medf).

The amount reprensents 5.7 percent, which has pushed the government financial entity to set aside May and June 2021 as recovery months.

Neef Public Relations and Marketing Officer, Whyghtone Kapasule, said in order to recover the remaining chunk of money, they have also embarked on intense sensitisation campaign.


“The clients need to be informed of the need to repay the loans. On this, we have sent messages on all community radios and the national ones, informing them that Neef inherited all Medf loans and as such, Neef is responsible to collect all the loans. Secondly, we have deployed loan officers and intensified client tracing, and have involved authorities in the districts,” he said.

According to Kapasule in some situations, they are issuing demand letters to clients with outstanding loans, engaging debt collectors and even opting for formal legal redress.

The K6.8 billion was borrowed from Export Development Fund.


He could neither confirm nor deny that a former cabinet minister under the previous regime was among those failing to service their loans with Neef.

It had been alleged that former minister Henry Mussa had been entangled in the Need loans.

However, another source at Neef pointed out that Mussa had not taken any loan.

“Mussa did not take any money he was simply a guarantor for a certain group in his constituency. The group started paying the money and they are remaining with around K3 million,” our source said.

Currently, Neef is also disbursing loans, an exercise that started in February 2021.

As of May 7, 2021, Neef had disbursed K5.8 billion to 2438 clients, which represents about 24380 individual clients going by the minimum membership of group loans which is 10 people.

According to Kapasule they have so far collected K596 million as loans that were disbursed in February, whose due time was March and some in April against a collection target of K613 million.

“That represents a recovery rate of about 97 percent and by extension, this means we have K17 million that is yet to be collected for the loans that were due March and April 2021,” he said.

But Catholic Commission for Justice and Peace (CCJP) National Coordinator Boniface Chibwana said Neef needs to learn from the past and refrain from politicising the loan facility.

“They need to put proper mechanisms on loan collection, clearly stipulating eligible people and do these people have business plans? Do we do due diligence to the people that are supposed to received the funds. Yes we understand that in Malawi poverty levels are high, a lot of people do not have resources much that it is the wish of everybody to have capital and start businesses but at the end of the day this is a revolving fund. This means the funds have to be given back so that they can benefit more people,” he said.

The loan facility was increased from from K15 billion to K40 billion.

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