Civil servants’ risk of loan default remains high despite virtually all their loans being salary-backed, as some public workers bypass borrowing limits by taking out loans from multiple lenders simultaneously. According to the Bank of Zambia’s (BoZ) 2026 Financial Stability Report, the share of loan delinquencies among public workers at microfinance institutions (MFIs) remained at 16.2%, significantly above the prudential threshold of 10%. The high level of loan delinquency among civil servants has primarily been attributed to the failure by some public workers to provide adequate coverage for loan repayments exceeding the maximum debt service ratios due to over-indebtedness. Economic...
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