The National Government's Uwezo Fund is facing headwinds as defaulters have risen to 48 per cent, amounting to Sh1.5 billion.
A decade after the revolving fund was launched by former President Uhuru Kenyatta's administration in 2013 to give women, youth and people living with disabilities access to finance to boost businesses and enterprises at the constituency level, the fund is facing turbulence.
Speaking at Mavoko Constituency, Machakos County on Friday during the disbursement of the revolving fund, Uwezo Fund Oversight Board Director Sam Ogolla said misinformation from the political class has hampered the repayment rate among beneficiaries.
"The repayment rate of the fund stands at 52 per cent countrywide, which translates to Sh1.5 billion in bad debts. Misinformation among beneficiaries by the political class and constituency leaders is to blame," Mr Ogolla said, adding that some beneficiaries are misinformed that the money should not be paid as it belongs to the government.
He further said the Uwezo Fund Oversight Board was reaching out to the political class to correct the misinformation.
"We are reaching out to legislators to help us talk to their constituents on how the revolving fund works and its importance in improving their lives. We have taken our sensitisation to the grassroots," he added.
Mavoko Constituency has been ranked the best constituency in terms of Uwezo repayment rate for four years in a row, with a repayment rate of 85 per cent. So far, 379 groups have benefited from loans worth Sh42 million, with more women and youth groups applying for the fund.
"Mavoko Constituency has become the pacesetter for repayment rates in the country. So far, only 200 out of 290 constituencies are eligible for the Uwezo fund. Here, beneficiary groups have been able to grow their businesses and improve their lives," Mr Ogolla added.
Mavoko MP Patrick Makau said training group members on best business practices was key to ensuring that members were able to repay the loan after making profits from the projects funded by the kitty.
He said making it mandatory for groups to outline their proposed business ideas was key. The lawmaker added that beneficiary groups are discouraged from sharing the money and instead work as a team.
"The Uwezo fund is a great facet in empowering women, youths and people with disabilities if members of different groups are well trained. It's not right for leaders to incite beneficiaries not to pay. It's government money that must be paid," said Mr Makau.
Beneficiaries laud the fund, outlining an avalanche of success stories in poultry, agriculture and other small and medium enterprises, describing the fund as significant for women and youths in business as it has helped them grow their businesses.
They said repaying the loans on time has been more beneficial as the kitty amount is further increased, saying repayment is friendly as there is no additional interest.
"The secret is to stick to the business idea and repay the loan on time. A well-thought-out and researched business will never collapse. Today we received a cheque for Sh500,000," said Janet Musyioki, chairperson of the Ujuzi Women Group.
During the disbursement, 20 starter groups and groups of people living with disabilities were among those who benefited from a Sh2.4 million fund.
