The Uwezo Fund is on the brink of a major shake-up after failing to adequately address serious audit queries regarding billions in unrecovered loans and poor financial oversight. Parliament’s Special Funds Accounts Committee is now considering merging the fund with other affirmative action initiatives to stem further losses.
Committee Chairperson Fatuma Zainab, speaking during a recent parliamentary session, expressed alarm over Uwezo Fund’s persistent mismanagement and weak loan recovery systems. “The structures in place are too weak to ensure accountability. Loans are disbursed without a robust system for tracking repayments, making recovery almost impossible,” she said. “We are now forced to consider merging these funds to improve efficiency and protect taxpayers’ money.”
According to reports by the Auditor General for the 2022/2023 and 2023/2024 financial years, the fund resolved only three out of ten flagged audit concerns. Notably, over Sh4 billion in loans issued in 2022/2023 remain unrecovered, and the fund left Sh193 million of its allocated budget unused.
The situation deteriorated further in the 2023/2024 fiscal year, with the fund’s bad debt portfolio surpassing Sh5 billion. The audit revealed further irregularities, including poor classification of receivables, a Sh74 million deficit, and Sh58 million in excess expenditure.
Staffing constraints also raised concern, with only 21 employees, mostly seconded from the State Department, running operations against an approved structure of 70 personnel.
The Committee noted that up to 75% of all disbursed loans remain unpaid, underscoring the fund’s inability to enforce repayments. Similar challenges were flagged in the Youth Enterprise Fund and Women Enterprise Fund, strengthening calls for a unified, accountable structure for managing government-backed credit schemes.
“It is evident that the intention behind these funds was noble, but the reality on the ground is different,” Zainab warned. “If we do not act, we risk writing off billions of shillings.”
The Committee has now given Uwezo Fund’s management 14 days to provide detailed responses to the Office of the Auditor General. The findings will inform a potential consolidation of affirmative action funds to improve efficiency, fiscal discipline, and service delivery.
Written By Rodney Mbua
