More disturbing facts have emerged, suggesting significant fund leakage at President William Ruto’s flagship projects, the Hustler Fund.
The Hustler Fund was launched with fanfare with the goal of providing credit to the majority of Kenyans, but Auditor General Dr. Nancy Gathungu claims that it is rife with financial irregularities.
Her study demonstrates how non-performing loans totaling Ksh.8 billion may be simply written off because they have not been serviced for the past year, with 64% of the money borrowed not being repaid.
Dr. Gathungu’s 2023/24 audit report reveals anomalies in the fund’s financial statements. The Auditor General questions the accuracy and correctness of the fund’s financial status.
Contrary to the financial statement submitted to the auditing team, which showed a cash balance of Ksh.3.3 billion, additional investigation revealed a total of Ksh.44.2 million in undeclared monies kept in Safaricom’s M-Pesa float balance and other major float balances held by other telecoms.
The audit study reveals that the fund has a high number of non-performing loans, with 64% of borrowers either fleeing with funds or failing to return for more than a year. As a result, Gathungu is throwing doubt on the recovery of Ksh.8.7 billion, which has not been serviced in more than a year.
The auditor’s report also states that the fund is losing billions of shillings due to duplicate loans.
A total of 880,013 loans worth Ksh.1.6 billion are duplicated, raising doubt on the authenticity of the outstanding loans. By the end of the fiscal year 2023/24, 235,628 loans totaling Ksh.210.4 million had gone unpaid and were no longer on the loan books.
A total of 1,186 minor consumers aged 10 days to 17 years used the loan program, increasing the default rate. This group received approximately Ksh.700,000 in payments.
The study also exposes how three service providers failed to account for interest on loans totaling Ksh.20 million.
The report also notes how the fund failed to establish an internal audit role, despite the fact that the Public Finance Management Act of 2012 requires the formation of proper internal audit structures.
Dr. Gathungu further claims that the fund did not invest in an effective loan management system. She also questions how Ksh.401 million was utilized to match consumers’ long-term deposits after borrowing more than five times.
The Auditor General questions the long-term viability of President Ruto’s favored projects, which she accuses of violating constitutional requirements and leaking money.
