Auditor General casts doubt on Fund’s urgency

The Auditor General has cast doubt on the initial urgency for the financial inclusion fund, considering not all of the funds have been disbursed.

A new audit report says, out of the total amount received by KCB, Sh9 billion, Sh540 million and Sh51.7 million were transmitted to Safaricom, Airtel and Telkom, respectively, totalling to Sh9.6 billion and leaving a balance of Sh824.9 million in the KCB account.

“The balance at KCB remains unutilised, thereby undermining the urgency with which the amount was sought under Article 223 of the Constitution,” read the report.

During the financial year 2022/23, the State Department for Co-operatives received Sh12 billion from Treasury as seed capital for the financial inclusion fund, popularly referred to as the Hustler Fund.

In the subsequent disbursement process, the State Department for Co-operatives allocated Sh9.46 billion and Sh2.54 billion to the Kenya Commercial Bank (KCB) and Family Bank respectively, funds that were passed on to Safaricom, Airtel and Telkom for further lending to eligible individuals.

According to the report, an additional Sh1 billion was received from Family Bank, pushing the total funds at KCB to Sh10.5 billion.

From this total, Sh9 billion, Sh540 million, and Sh51.7 million were dispatched to Safaricom, Airtel, and Telkom, respectively, totalling Sh9.6 billion. This left a residual balance of Sh824.9 million in the KCB account.

The new financial initiative was intended to innovate, develop, and deploy financial services and products that are affordable, accessible, and appropriate for those at the bottom of the economic pyramid.