The Lower Eastern Times Opening The Third Eye
Related Articles
Large amounts of taxpayer-funded loans issued to youth, women, persons with disabilities, and other special groups are at risk of being lost, according to new audit reports showing widespread failure to repay.
The reports reveal that millions of shillings have already been wasted with little accountability, threatening the survival of empowerment funds that rely on consistent loan recovery. Auditor General Nancy Gathungu has cautioned that unless immediate action is taken, these programmes may not remain sustainable.
Click here to join our WhatsApp Channel
Across multiple counties, loan balances remain uncollected years after they were issued. Even more concerning, the Auditor General noted that many beneficiaries cannot demonstrate how they used the funds, as some counties lack proper monitoring and evaluation systems.
Additionally, many intended beneficiaries—especially youth, women, and persons with disabilities—have been excluded from the empowerment schemes because counties either failed to allocate money or provided inadequate funding.
The findings are contained in audit reports for youth, women, PWD and enterprise funds for the financial year ending June 30, 2025, presented in the Senate.
In Samburu County, Sh31.01 million issued through the Youth and Women Enterprise Development Fund remains unrecovered. Gathungu noted that the receivables are long overdue, yet the county has not made provisions for bad debts.
Key documents such as loan forms, debtor lists, ageing analyses, and proof of recovery efforts were missing. The fund has also fallen into a cumulative deficit of Sh37.58 million, nearly halving its initial capital of Sh75 million—undermining its purpose as a revolving fund.
Marsabit County faces similar issues, with Sh24 million issued seven years ago still unpaid. The audit found no evidence of follow-up, demand notices, or legal action. The fund has a Sh3.60 million deficit and its legally mandated 10-year term expired during the audit period, yet it continued issuing loans without an active board.
In Laikipia County, over Sh5.58 million has remained unpaid for years. The Auditor General reported a lack of recovery attempts, no insurance or collateral, and no debt management policy—issues previously flagged with little improvement.
Busia County also mirrors the pattern. Sh66.25 million lent to 63 co-operatives since 2014 remains outstanding, with no proof of recovery efforts. The loans were issued without collateral, making enforcement difficult, and auditors could not confirm the accuracy or recoverability of the receivables.
Vihiga County is battling overdue loans totalling Sh52.08 million, many of which have had no repayments for years.
Kajiado County’s unpaid loans amount to Sh90.64 million, with basic loan documents—agreements, schedules, or breakdowns—missing. No bad debt provisions were made, and recovery efforts were not demonstrated.
In Nyeri County, audit reviews of 19 beneficiary files show that 58% of loans—Sh8.6 million—are in default. Seventeen loans had surpassed the six-month grace period with no repayment, and five beneficiaries had never paid anything back. The Auditor General concluded that recovering the Sh8.6 million is unlikely.
