Hustler Fund Faces Ksh.8B Loss in Bad Loans – Audit.
The Auditor General, Dr. Nancy Gathungu, has raised concerns over financial mismanagement in President William Ruto’s Hustler Fund, citing significant losses and financial inconsistencies.
Dr. Gathungu’s audit report for the 2023/24 financial year reveals that Ksh.8 billion in non-performing loans might be written off due to a lack of repayment. She highlights that 64 per cent of the borrowed funds remain unpaid for over a year, raising questions about the fund’s viability. The report further indicates that Ksh.8.7 billion remains unrecovered, with many borrowers either defaulting or disappearing.
The audit also exposes discrepancies in the financial statements of the Hustler Fund. Although the financial report presented to auditors indicated a cash balance of Ksh.3.3 billion, further scrutiny revealed an undeclared Ksh.44.2 million held in the M-Pesa float balance at Safaricom and other principal float balances at different telecom companies.
Significant financial mismanagement is evident in the duplication of 880,013 loans, amounting to Ksh.1.6 billion, bringing into question the accuracy of outstanding loan records. Additionally, 235,628 loans, totaling Ksh.210.4 million, were unaccounted for and missing from the loan books by the end of the financial year. The report also discloses that 1,186 underage individuals, aged between 10 days and 17 years, accessed loans, leading to an increased default rate, with nearly Ksh.700,000 disbursed to these borrowers.
Missing Interest and Questionable Loan Management
The Auditor General’s report further highlights that three service providers failed to account for Ksh.20 million in loan interest. Additionally, the fund’s failure to establish an internal audit function, as required by the Public Finance Management Act, 2012, is another major concern. Dr. Gathungu also notes that the fund did not implement a proper loan management system, leading to financial mismanagement. She questions the utilization of Ksh.401 million used to match long-term savings for borrowers with multiple loans.
Read Also: Khalwale Bows to Pressure, Moves to Withdraw Motorcycle Bill
The findings of the audit raise doubts about the sustainability of President Ruto’s flagship initiative. Dr. Gathungu points out that financial leakages and constitutional breaches threaten the fund’s future, emphasizing the urgent need for proper financial oversight and accountability.
Hustler Fund Faces Ksh.8B Loss in Bad Loans – Audit.
