Govt Suspends 2026 CDF Loans As Repayment Rate Sinks To 35 Percent

The Government has suspended the 2026 loan empowerment component of the Constituency Development Fund (CDF). Borrowers have repaid only 35 per cent of the money lent since the expanded programme began in 2021.

Martin Sodala, Director of Planning and Information at the Ministry of Local Government and Rural Development, said the freeze would let the ministry recover funds already given to various groups, among them marketeers. The money set aside for this year’s loans has been moved to other areas within the CDF value chain.

The loan window was designed to support enterprises, with priority for youths, women, persons with disabilities and other vulnerable people. A repayment rate of 35 per cent means that for every K100 lent since 2021, only about K35 has come back. Mr Sodala said the suspension was also meant to deal with a poor culture of loan repayment.

“That 2026 loan empowerment component has since been suspended to allow for recoveries to be made from those who got loans,” Mr Sodala said.

He was answering Mupila Kameya, president of the Zambia National Marketeers Credit Association. Mr Kameya raised the empowerment of marketeers at the National Development Coordinating Committee meeting organised by the Ministry of Finance and National Planning.

Mr Sodala told the meeting that the ministry had struggled to get its money back from the outset.

“Those that had initially been given access to loan empowerment funds under CDF, we have struggled as a ministry to recover loans provided,” he said.

The suspension does not stop lending completely. Mr Sodala said disbursements were continuing, but only from money recovered on existing loans. In practice, new borrowers can only be funded when earlier borrowers pay back.

He gave no date for a return to full lending.

“I think we’ll be guided at an appropriate time when the Ministry will make a decision whether we go back to giving out these loans in full,” he said.

For now, he said, the Government’s focus is on recovering the outstanding loans.

The decision falls hardest on marketeers, the group Mr Kameya’s association represents, and they are already under pressure in the capital. Lusaka City Council’s seven-day ultimatum ordering street vendors out of undesignated trading areas in the central business district has reached its deadline.

Lusaka Mayor Chitambala Mwewa said vendors who do not return to their stands will have their trading spaces re-allocated. About 200 of an estimated 8,000 vendors in the central business district have moved voluntarily.

Mr Kameya welcomed the relocation but asked the council for wider consultation. He called for vendors to be profiled and for financial empowerment measures for traders who cannot immediately be accommodated in designated markets.

The rest of the CDF continues to pay for visible projects. In Mwinilunga, North-Western Province Permanent Secretary Colonel Grandson Katambi (Rtd) pointed to Chief Kakoma’s new palace, completed with CDF money.

“The completion of Chief Kakoma’s new palace demonstrates that CDF is delivering visible results,” Col Katambi said.

In Katete, Local Government Service Commission chairperson Laxon Kazabu said the commission had completed a staff audit, a qualification check and a CDF project inspection at the town council.

In Mwandi, local leaders are already encouraging residents to apply for support under the 2027 CDF loans and grants. They want residents to prepare viable project proposals that can create jobs and raise household incomes.

For now the 2026 loan window stays shut. Any money reaching new borrowers will come only from what earlier beneficiaries repay, until the ministry decides to resume full lending.

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