Committee for the Abolition of Illegitimate Debt

Lower-income country external debt payments to private lenders are three times higher than to Chinese lenders.

Various reporting on the debt crisis in the global south casts China as the largest lender. This is not true. While China is a significant lender, debt payments to nonChinese private lenders are far larger than to Chinese public and private lenders.

Across all low-income (26 countries), lower-middle income countries (51 countries), and upper-middle income countries classed as small island developing states (11 countries), external debt payments to private lenders are three times higher than to Chinese lenders. This is 88 countries in total. Payments are both principal and interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. .

Between 2020 and 2025, using data from the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, $354 billion has been spent on debt payments to private lenders, compared to $304 billion to multilateral lenders, $125 billion to non-Chinese government lenders and $117 billion to Chinese public and private lenders. 39% of lower-income external debt payments are to private lenders, 13% to China.

In 2025 the proportion of payments to Chinese lenders is slightly higher (15%) and to private lenders slightly lower (34%), which reflects the fact that China offered to suspend debt payments for lower-income countries in 2020 and 2021 during the Covid pandemic, and those payments are now coming due to be paid. In contrast, private lenders refused to suspend debt payments and continued to be paid in full in 2020 and 2021.

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. [1]

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. [2]

These figures are the gross amount across all the 88 countries. It therefore may be that they are dominated by payments by the largest countries within the 88. It also may be that countries with the highest debt payments have a different proportion of creditors.

We have therefore calculated the breakdown of creditors for the 26 countries spending over 18% of government revenue on external debt payments, plus six countries undertaking debt restructurings in this period. For these 32 countries, the mean unweighted average external debt payments are 39% to private (nonChinese) lenders, 32% to multilateral lenders, 15% to Chinese lenders and 14% to other governments. Private lenders receive the same proportion of debt payments from countries with high debt payments, as the gross figures for the 88 countries in total. [3]

Of these 32 countries, in 21 of them (66%) private lenders receive over 30% of external debt payments. In contrast, in only six (19%) do Chinese lenders receive over 30% of external debt payments.
In 16 of the 32 countries (50%), private lenders receive over 40% of external debt payments. Only in one (3%) do Chinese lenders receive over 40% of external debt payments.

External debt payments by lending group for 32 countries with highest debt payments / undertaking restructuring.

All data is available at https://debtjustice.org.uk/wpcontent/uploads/2025/08/Payments-by-creditor-grouping_08.25.xlsx

Source : https://debtjustice.org.uk/press-release/debt-payments-to-private-lenders-three-times-higher-than-to-china