Uwezo Fund face steep loss of over Sh4billion due to gross mismanagement
The Auditor General’s attention has been drawn to the Uwezo Fund after it was warned of internal control flaws in its constituency administration, posing a danger of losing at least Sh4.64 billion handed out to various groups since its creation.
According to the Auditor-General report on the fund for the year ending June 2021, the fund is on the verge of collapsing due to its failure to execute prudential financial management principles, with the amount in danger rising from Sh3.9 billion in June 2019 to Sh4.1 billion in June 2020, and now Sh4.6 billion in June 2021.
The administration, one of Kenya’s Vision 2030 and Jubilee government’s flagship projects, gave out loans without following protocol, according to Nancy Gathungu, and lacked adequate methods to assure repayment.
“However, a review of records maintained at sampled Constituency Uwezo Fund offices revealed the failure to institute measures for effective of beneficiaries of loans, leading to high loan defaulters.
“The records further revealed deficiencies in documentation, authorisation, and approvals of loans to prevent irregular loans. Individual loan accounts and details of loan beneficiaries were not maintained in Muhoroni and Khwisero constituencies. Further, some groups were given loans yet there was no evidence of approval and completed application forms,” Gathungu stated.
It is unclear why the fund administration has neglected to provide auditors with records of organisations loaned money since inception.
The fund is expected to offer two loan products: a Wezesha loan for first-time borrowers with a credit amount ranging from Sh50,000 to Sh100,000, and an Endeleza loan for repeat borrowers with a loan amount of up to Sh500,000.
The fund claims to have disbursed Sh6.1 billion on its website, which is Sh1 billion less than the fund’s Chief Executive Officer (CEO), Peter Lengapiani said during the ‘Sema Na Spox’ forum, a meticulously planned public relations exercise that promotes government programs.
During the event, the fund announced that it has repaid a total of Sh2.5 billion since its start, marking a repayment percentage of 39.4 per cent.
According to the website, Sh290.3 million has been distributed in Nairobi constituencies, Sh170.5 million in Kisii constituencies, Sh157 million in Homa Bay, Sh153.3 million in Busia, Sh276.7 million in Nakuru, and Sh22 million in Lamu since its beginning.
“The challenge from Uwezo Fund is that some of our young men and women are not coming up and going to the youth offices to be advised,” says Uwezo.
