Table-Banking Groups Empowerment Fund in Makueni County has written off loans amounting to Ksh. 24,008,943 loaned out to the Youth, Men, Women and Persons with Disabilities. The Fund, sources say, is struggling for survival following the failure of the beneficiaries to repay the loans which could lead to bankruptcy and shutdown.
However, the county government under Governor Multula Kilonzo Jnr could pump in more money to sustain it but queries are being asked on the manner the fund is managed. There is fear that groups and individuals take loans and disappear without trace leading to write-offs of defaulted loans worth millions of shillings.
However, it is suspected that fund managers collude with some group officials and individuals to write off the loans. Fund managers have been complaining that they have tried legal means and visits to defaulters to demand payments but it has been without much success.
Even though the governor could pump and allocate more funds in the coming financial year to save the Fund from collapse, it should be noted that failure to recover loans undermines the achievement of the Fund’s main objective of empowering the targeted groups economically.
It has also been discovered that the fund’s managers entered into a skewed Memorandum of Understanding on Fixed Deposits with a local bank. What is surprising is that the fund’s managers signed a Memorandum of Understanding with the bank to deposit Ksh. 73,882,885 interestingly the fixed deposits earned no interest as the MoU did not provide for the payment of interest on the deposits. In the circumstances, the Memorandum of Understanding appears to favour the bank and the Fund has continued to forfeit interest income due to the skewed contract. The fund’s managers should come out, either terminate the contract or renegotiate the contract