Lower-income countries are spending three times more on debt payments to private lenders than to China. Research by Debt Justice, using World Bank and IMF data, finds that between 2020 and 2025, 39% of external debt payments by lower-income countries are to commercial lenders, compared to 34% to multilateral institutions, 13% to Chinese public and private lenders, and 14% to other governments.[1]
While China is a significant lender, the figures counter the myth that China is the only lender responsible for creating debt crises in lower-income countries. The data covers 88 countries – all low-income (26 countries), lower-middle income (51 countries), and upper-middle income classed as small island developing states (11 countries).
Tim Jones, Policy Director at Debt Justice, said:
“Commercial high-interest lenders are receiving the greatest debt payments by lower-income countries. Where debt payments are too high, all external creditors need to cancel debt, in proportion to the interest rates they charged. Western governments need to ensure that private lenders take part in debt cancellation. The UK can lead the way by passing legislation to suspend debt payments during debt relief negotiations and prevent recalcitrant creditors holding out for more than other creditors.”
The research also finds that for the 32 countries with the highest external debt payments, in 21 of them private lenders receive over 30% of external debt payments. In contrast, in only six of the 32 do Chinese lenders receive over 30% of external debt payments.
Commercial creditors have been a problem for virtually all countries going through a debt restructuring in recent years. In Chad, Glencore delayed negotiations while continuing to be paid in full, and Chad received no debt relief. Ethiopia’s private bondholders have refused to accept a generous offer from the Ethiopian government and have threatened to sue in the UK in order to pressure Ethiopia to accept a weak deal. After four-and-a-half years of negotiations Zambia is still to reach a deal with some private creditors, including UK-based Standard Chartered. Ghana has not reached deals with any with non-bond private creditors. Some of these creditors are using political pressure to try to be paid in full.
South Sudan has been successfully sued for $657 million by Afreximbank in the UK courts after defaulting on high-interest loans from the profit-making lender. Afreximbank is refusing to participate in the Common Framework in Ghana and Zambia, and its loans are governed by English law, so without legislation in the UK there is no point in South Sudan applying for the Common Framework. South Sudan is also being sued by BB Energy in the UK and Qatar National Bank in the US. Similarly, Malawi has been trying to negotiate a debt restructuring with Afreximbank and other high-interest lenders since May 2022, with no progress made in three years.
Bondholders are refusing to restructure Ukraine’s GDP-linked warrants. The debts are governed by English law. In Sri Lanka, Hamilton Reserve Bank has rejected the bondholder restructuring and is continuing to pursue a court case in New York state.[2]
External debt payments by 88 low-income and lower-middle income countries, and upper-middle income countries classed as small island developing states, by creditor grouping, $ billion
| Lending group | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total | % |
| China, public and private | 13 | 11 | 17 | 17 | 30 | 29 | 117 | 13% |
| Other governments | 15 | 19 | 14 | 17 | 34 | 25 | 125 | 14% |
| Private lenders (excluding Chinese) | 57 | 55 | 54 | 48 | 76 | 64 | 354 | 39% |
| Multilateral lenders | 30 | 37 | 37 | 56 | 74 | 70 | 304 | 34% |
| Total | 114 | 122 | 122 | 139 | 213 | 189 | 900 |
External debt payments by lending group for 32 countries with highest external debt payments / undertaking restructuring
| Lending group | Mean average across 33 countries | Number of countries where debt payments to creditor group are over 20% of payments | Number of countries where debt payments to creditor group are over 30% of payments | Number of countries where debt payments to creditor group are over 40% of payments |
|---|---|---|---|---|
| China, public and private | 15% | 9 | 6 | 1 |
| Other governments | 14% | 6 | 1 | 1 |
| Private lenders (excluding Chinese) | 39% | 27 | 21 | 16 |
| Multilateral lenders | 32% | 23 | 16 | 9 |
Notes
[1] A briefing with the full detail is available at https://debtjustice.org.uk/wp-content/uploads/2025/08/Debt-payments-by-creditor-grouping_08.25.pdf A spreadsheet with all the calculations is at https://debtjustice.org.uk/wp-content/uploads/2025/08/Payments-by-creditor-grouping_08.25.xlsx
[2] Further detail and references for all these country cases is available at:
https://debtjustice.org.uk/wp-content/uploads/2025/07/Legislation-FAQs_07.25.pdf