Auditor General raises red flag that Ksh.8B Hustler Fund could be lost
More damning revelations by Auditor General have emerged indicating severe financial leakage at President William Ruto’s flagship projects—the Hustler Fund
More damning revelations by Auditor General have emerged indicating severe financial leakage at President William Ruto’s flagship projects—the Hustler Fund.
Launched with pomp and fanfare, the Hustler Fund was aimed at creating access to credit for a majority of Kenyans, but according to Auditor General Dr. Nancy Gathungu, the Hustler Fund is riddled with financial improprieties.
Her report shows how non-performing loans amounting to Ksh.8 billion could just be written off, as they have not been serviced for the last year, with 64 per cent of the money borrowed not being repaid.
In her 2023/24 financial year audit report, Dr. Gathungu lays bare the inconsistencies in the fund’s financial statement. The Auditor General raises questions about the accuracy and correctness of the financial position at the fund.
Contrary to a financial statement presented to the auditing team showing a cash balance of Ksh.3.3 billion, further analysis unearthed a total of Ksh.44.2 million in undeclared funds held in the M-Pesa float balance at Safaricom and other principal float balances held at other telcos.
The audit report shows the high non-performing loans at the fund, with 64 percent of borrowers either disappearing with funds or not repaying for over a year. As such, Gathungu is casting doubt over the recovery of Ksh.8.7 billion, which has not been serviced for more than a year.
The fund, according to the auditor’s report, is also losing billions of shillings through duplicate loans.
A total of 880,013 loans amounting to Ksh.1.6 billion are duplicated, casting doubt on the accuracy of the outstanding loans.
A total of 235,628 loans amounting to Ksh.210.4 million were never repaid and were nowhere on the loan books by the end of the 2023/24 financial year.
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A total of 1,186 underage customers aged between 10 days and 17 years also accessed the credit facility, increasing the default rate. Close to Ksh.700,000 was paid to this group.
The report also reveals how three service providers could not account for interest on loans amounting to Ksh.20 million.
The report also highlights how the fund failed to establish an internal audit function, contrary to the Public Finance Management Act, 2012, which calls for the establishment of appropriate arrangements for internal audit.
Dr Gathungu also states that the fund did not invest in a proper loan management system. She is also questioning how Ksh.401 million was used to match the long-term savings of clients who had borrowed more than five times.
The Auditor General casts doubt over the sustainability of President Ruto’s pet projects, which, according to her, are replete with breaches of constitutional requirements and financial leakages.
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