Neef registers K1.4 billion loss

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.

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“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.

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