Uwezo Fund stops disbursement of loans in Marsabit over high default rate
Marsabit Central Assistant County Commissioner Paul Langat told the nation.africa during an interview that out of the Sh20.6 million disbursed to youths in Saku constituency, only Sh900,000 has been repaid.
Majority of the groups in Marsabit County that received loans from the government's Sh5 billion Uwezo Fund to promote their enterprises have defaulted on payments.
The government has consequently halted the disbursement of the funds in the county after numerous debtors, mainly first borrowers, failed to meet loan obligations.
Marsabit Central Assistant County Commissioner Paul Langat told the nation.africa during an interview that out of the Sh20.6 million disbursed to youths in Saku constituency, only Sh900,000 has been repaid.
“We appeal to the youth groups that benefited from the Uwezo Fund loans to remit back the loans to give room to other deserving groups to benefit from the revolving fund,’’ Mr Langat said.
He lamented that the cases of loan defaulting were worrying the authorities since other potential beneficiaries were locked out of such opportunities.
The administrator encouraged officials of the groups in question to ensure they remit the funds, saying this will increase their chances of benefiting from other related funds at both national and county government levels.
More than 186 of the groups are yet to repay the loans.
The loans were disbursed to 196 youth groups in Saku constituency alone yet only 10 groups have attempted to repay their loans.
This means new women and youth groups will not benefit from the fund.
Further disbursement
The defaults amounted to Sh16.8 million while the government was forced to halt further disbursement of the remaining Sh3.8 million. The loans were disbursed between 2014 and 2017.
The groups were recommended and registered by the Social Development Office and applied for the loans with the approval of chiefs and assistant chiefs.
This was part of the Sh5 billion Uwezo Fund that was disbursed by the government across the nation to promote enterprises in 2014.
Mr Langat explained that they have resolved to take recourse to stem repeated adjournments in debt payments.
He added that the government is looking to revamp policies on loan defaulters defining timelines to ensure that those with unpaid revolving fund loans do not vanish.
He explained that the government had resorted to using the local chiefs and the constituency management committee in an attempt to trace the youth groups that have since vanished.
He assured the residents that the government was trying to resolve the matter diplomatically without treating them as willful defaults due to the hard economic times that currently plague the majority of youths across the nation.
However, he said the repayment challenges could have been deepened by the Covid-19 pandemic economic woes.
The administrators said that a turnaround in the future disbursement of the funds to youths and the increase of the volume of the loans in the region was dependent upon the successful recovery of loans from the first borrowers.
Further, the government was seeking to create avenues for enhancing the supervision of the loan beneficiaries and loan recovery.
Meanwhile, Youth Fund loan beneficiaries were advised to visit the regional offices or the offices of the sub-county headquarters, to check on the status of their loans.
Marsabit County in total received allocations of Sh87.4 million. Its constituencies of Saku constituency got Sh18.6 million while groups in Laisamis received Sh21.3 million. Those in Moyale received Sh23.8 million and those in North Horr Sh21.7 million.
