Private lenders, not China, dominate debt repayments from poorer nations — study

Lower-income countries are paying private creditors nearly three times more than they repay China, according to new research by UK-based advocacy group Debt Justice, challenging dominant narratives around global debt.
Between 2020 and 2025, 39% of the $354 billion in external debt repayments from 88 low-income countries and small island states will go to private lenders — compared to just 13% to Chinese public and private institutions. Multilateral institutions will receive 34%, and other governments 14%. The findings cast doubt on claims that China is the primary cause of debt distress in the Global South. “Commercial high-interest lenders are receiving the greatest debt payments by lower-income countries,” said Tim Jones, policy director at Debt Justice. “Where debt payments are too high, all external creditors need to cancel debt, in proportion to the interest rates they charged,” he added.
Countries face growing repayment pressures amid high interest rates and post-pandemic borrowing. Repayments to multilateral lenders are set to rise sharply — from $30 billion in 2020 to $70 billion by 2025 — as pandemic-era loans mature. Out of the 32 most debt-stressed nations, 21 pay over 30% of their debt to private lenders, while only six do so with China. Jones called for proportionate debt cancellation from all external creditors, especially those who charged high interest, to enable developing nations to prioritize vital investments in health, education, and climate resilience.