The government has failed to recover Sh4.2 billion in outstanding loans disbursed to women and youth groups through Uwezo Fund, according to Auditor-General Nancy Gathungu.
The government’s inability to fully recover Sh8.1 billion in loans disbursed since inception in 2013, as revealed in the audited accounts of Uwezo Fund for fiscal year 2024/25, is worrying.
According to Ms Gathungu, the non-recoverability leaves a massive hole for an initiative born of hope, where a generation’s future was supposed to be built but has now sunk into crisis.
“The balance has been outstanding for over three years,” says Ms Gathungu, adding, “in the circumstances, the recoverability, accuracy and completeness of the long-term outstanding loans could not be confirmed.”
Uwezo Fund, a revolving fund, is a flagship programme for Vision 2030 aimed at enabling women, youth and persons with disabilities to access finance to promote businesses and enterprises at the constituency level.
This is meant to enhance economic growth towards the realisation of the Sustainable Development Goals (SDGs), specifically the eradication of extreme poverty and hunger and the promotion of gender equality and the empowerment of women.
The fund is highly devolved and has adopted the concept of a bottom-up approach, with decision-making done at the grassroots level.
It disburses its loans at the constituency level through working committees and is meant to assist women's groups, youth organisations, and people living with disabilities to boost their businesses.
The latest data from the fund shows that it has 1.13 million members, including 789,277 females and 337,452 males.
Under this, there are three groups: 54,531 women's groups, 27,281 youth groups, and 2,135 people living with disability groups.
Since it was set up in 2013 by former President Uhuru Kenyatta, it has disbursed Sh8.1 billion to the 290 constituencies, as per the data available.
There are also 346,074 Kenyans who were individual beneficiaries- 195,470 males and 150,604 females.
The Uwezo Fund gives two loan products: the Wezesha loan, which is for first-time borrowers who should get between Sh50, 000 and Sh100,000 to support their enterprises, and the Endeleza loan for repeat borrowers who qualify for up to Sh500,000.
The Uwezo Fund has distributed Sh7.2 billion primarily to women.
Photo credit: Photo | Pool
The Auditor-General has continuously flagged the Uwezo Fund over mismanagement, warning of the imminent collapse of the fund due to the failure to implement prudent financial management policies.
The failure to furnish the auditors with records of groups loaned money since inception is also a concern over whether the fund is being advanced to the deserving cases.
For instance, Ms Gathungu, in her report on the accounts of Uwezo Fund for the year ending June 30, 2021, noted that some of the fund’s constituency offices shut down years ago and taxpayers are staring at a loss.
Ms Gathungu also notes that Uwezo Fund management cannot account for the billions lent to various groups since the fund’s establishment.
The audit report notes that Uwezo fund offices in Bureti constituency have been dormant since 2016, threatening recovery of the outstanding loans.
Ms Gathungu has further flagged the fund for internal control weaknesses in its administration at the constituency level.
Some of the issues Ms Gathungu has flagged include the management issuing loans to groups without following procedure, with no proper means to follow up on the repayment.
“The records revealed deficiencies in documentation, authorisation and approvals of loans to prevent irregular loans. Individual loan accounts and details of loan beneficiaries were not maintained, for instance in Muhoroni and Khwisero constituencies,” the audit notes.
“The effective management and recoverability of the loans may not be achieved. This raises doubt on the controls put in place to implement the activities of the fund to achieve the intended purpose,” warns the Auditor-General.
