GOVT SUSPENDS 2026 CDF LOANS AS REPAYMENT RATE FALLS TO 35 PERCENT
The government has suspended the 2026 loan empowerment component of the Constituency Development Fund (CDF) after recovering only 35 per cent of loans disbursed since the expanded programme was introduced in 2021.
Ministry of Local Government and Rural Development Director of Planning and Information Martin Sodala said the suspension would allow the ministry to focus on recovering outstanding funds from previous beneficiaries, including marketeers.
He said funds allocated for the 2026 loan component had been redirected to other areas within the CDF value chain.
“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 responding to Zambia National Marketeers Credit Association president Mupila Kameya, who raised concerns over the empowerment of marketeers during a National Development Coordinating Committee meeting organised by the Ministry of Finance and National Planning.
Mr Sodala said the ministry had struggled to recover loans since the empowerment component was introduced.
“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 loan facility was introduced to support small businesses, with priority given to youths, women, persons with disabilities and other vulnerable groups.
With a repayment rate of just 35 per cent, only about K35 has been recovered for every K100 disbursed since 2021.
Mr Sodala said the poor repayment rate had contributed to the decision to suspend new lending while Government works to address the repayment challenge.
He, however, clarified that lending had not stopped completely, saying new loans could still be issued from funds recovered from previous beneficiaries.
This means that new borrowers can only access funds as existing beneficiaries repay their loans.
Mr Sodala said the ministry had not set a date for the full resumption of the loan programme.
“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 priority was to recover outstanding funds.
The suspension comes at a challenging time for marketeers in Lusaka, following the expiry of a seven-day ultimatum issued by the Lusaka City Council for street vendors to leave undesignated trading areas in the central business district.
Lusaka Mayor Chitambala Mwewa has warned that vendors who fail to return to designated trading spaces risk having their trading areas re-allocated.
About 200 of an estimated 8,000 vendors in the central business district had reportedly moved voluntarily.
Mr Kameya welcomed the relocation initiative but called for broader consultation, including profiling vendors and providing financial empowerment for traders who cannot immediately secure space in designated markets.
Meanwhile, other components of the CDF programme continue to fund community projects across the country.
In Mwinilunga, North-Western Province Permanent Secretary Colonel Grandson Katambi (Rtd) cited the completion of Chief Kakoma’s new palace as an example of a project funded through CDF.
“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, qualification verification and inspection of CDF-funded projects at the town council.
In Mwandi, local leaders are encouraging residents to prepare viable proposals ahead of the 2027 CDF loan and grant programme, with a focus on projects capable of creating employment and improving household incomes.
For now, however, the 2026 CDF loan window remains suspended, with new lending dependent on the recovery of funds from previous beneficiaries.
The loan and grant components of the Constituency Development Fund (CDF), including the scholarship component, should be reviewed and strengthened. Government should also engage an independent entity to conduct a thorough assessment and evaluation of the effectiveness and impact of the CDF.
Many local authorities have highlighted improvements in performance based largely on the amount of CDF funds disbursed and the number of projects implemented, rather than on compliance with established procedures, value for money, and the actual impact of CDF interventions in transforming the lives of ordinary Zambians. Greater emphasis should therefore be placed on outcomes, sustainability, transparency, accountability, and measurable improvements in the welfare of beneficiaries.
Equally, projects undertaken under the CDF should be properly appraised before approval, competently executed, and regularly monitored and evaluated to ensure that public resources are used effectively and achieve their intended objectives.
Any allegations or evidence of misappropriation, abuse, or misuse of CDF resources should be thoroughly investigated by the appropriate authorities. Where wrongdoing is established, those responsible should be prosecuted before the courts of law in accordance with the law.