The persistent issue of delayed government payments […]

The persistent issue of delayed government payments to microfinance institutions- MicroFins, that extend loans to civil servants has resurfaced, sparking renewed anxiety within the sector.

According to sources within the microfinance industry, the government has yet again fallen behind on settling monthly loan deduction payments for the past three months, creating significant liquidity and operational challenges. A source familiar with the matter confirmed to the Zambian Business Times (ZBT) that the government is now in arrears for three consecutive months as two payments have not been remitted and the third one is also pending as the submissions have been made by the Microfins.

As a result, many affected MicroFins are struggling to maintain their operations, including processing client refunds and funding routine activities, due to mounting cash flow constraints. When contacted for a comment by the Zambian Business Times – ZBT, Secretary to the Treasury Felix Nkulukusa stated he was unaware of the development, explaining, “I am not aware of that as I am just returning from outside the country.”

 He referred all further enquiries to the Ministry of Finance’s Principal Public Relations Officer, Chileshe Kandeta, Kandeta who could neither confirm or deny the revelations but asked for a written query. The continued payment delays have heightened concerns among Microfins, who warn that persistent arrears could undermine the sector’s stability and its ability to support civil servants and government workers.

Article by Justine Phiri