K21.3 billion meant to lift young people and women out of poverty remains undistributed, but the institution entrusted with managing the money has turned its axe on 23 employees.
The Malawi Enterprise Development Fund (MEDF) has dismissed the employees over alleged irregularities in loan approvals, raising questions about accountability at a fund struggling to get public money into the hands of its intended beneficiaries.
Only K3.7 billion of the K25 billion released for the Constituency Development Fund (CDF) youth and women loans had reached beneficiaries by November 4, leaving K21.3 billion untouched with less than five months before the financial year ends on March 31, 2027.
MEDF sent 25 employees on forced leave in November last year pending investigations into alleged misconduct. Twenty-three have now been dismissed following disciplinary hearings, while the remaining two are expected to face hearings today.
Those dismissed include five senior managers, four chief officers, six zone managers, seven senior officers and three branch supervisors.
Their dismissal letters cite neglect of duty and lack of competence, with most accused of approving loans exceeding K30 million without the required committee approval.
However, some of the affected employees have challenged the decision, describing it as politically motivated because they were recruited under the previous Malawi Congress Party administration.
They also argue that management approved the loans and question why other employees allegedly involved in similar transactions have not faced the same punishment.
The controversy is compounded by the cost of keeping the employees away from work for nearly a year while continuing to pay their salaries. Their monthly earnings ranged from K1.3 million to K3.2 million, costing the fund an estimated K46.8 million every month.
Meanwhile, MEDF’s financial position has deteriorated sharply. Its externally audited accounts show that the fund recorded a K144.966 billion loss in the year ending March 31, 2026, despite receiving a K137.686 billion government recapitalisation.
The loss was largely driven by a K144.748 billion allowance for credit losses, an accounting provision reflecting concerns about the recovery of outstanding loans.
Net loans receivable dropped from K142.3 billion to K80.3 billion, even as total income increased from K38.9 billion to K48.8 billion.
