EDF capital base fell short in 2025—report

Export Development Fund (EDF), a development finance institution wholly-owned by the Reserve Bank of Malawi (RBM), closed the year 2025 undercapitalised, with equity below the minimum recommended threshold of $50 million (about K86.5 billion). Following this development, the Registrar of Financial Institutions waived EDF’s compliance with the threshold, citing a pending review of the directive. Financial market analysts have described the undercapitalisation as worrisome, saying well-capitalised development finance institutions ensure that borrowers have access to affordable and readily available capital to meet obligations.

The minimum capital requirement is stipulated under the Financial Services (Capital Adequacy for Development Finance Institutions) Directive, 2018 and is designed to keep institutions liquid enough to support critical value chains. RBM’s financial report shows that EDF did not receive capital funding during the year and remained below the regulatory minimum. The financial report, signed by RBM Governor George Partridge, confirmed the waiver remains valid.

During the review period, EDF issued 80 million new ordinary shares at par value of K1 each, closing the year with 710 million shares, up from 630 million in 2024. Reads the report in part: “As per directive, Export Development Fund is required to have a minimum capital of $50 million. As at 31 December 2025, EDF was still below that limit.” Financial expert Brian Kampanje said in an interview on Sunday that EDF should be well capitalised to finance large-scale projects such as roads, import substitution and export-driven initiatives.

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He said: “Malawi can enjoy the multiplier effect as borrowers expand operations, benefiting more people through trade and employment “EDF should strive to be more visible to the local entrepreneurs focused on the export-driven initiatives. It should emulate export-import banks in countries such as China and India.” EDF management reported the fund’s capital base grew 23 percent to K87.4 billion in 2025, up from K70.9 billion in 2024, driven by strong performance. It said EDF posted a K16.7 billion profit and more than doubled loan disbursements to K29.2 billion from K13.5 billion the previous year. “The increase in disbursements enabled EDF to support enterprises in key sectors while maintaining a strong financial position,” reads the report.

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