Auditor General Nancy Gathungu has unearthed major irregularities in President William Ruto’s flagship project, Hustler Fund.
In a report following the Fund’s audit, Gathungu revealed that unregistered and unqualified individuals were given millions of shillings in loans.
According to Gathungu, some Kenyans were given loans exceeding the set limits, while others lacked identity cards.
Gathungu pointed out that some borrowers were advanced loans on multiple occasions before repaying the previous amount, adding that some loan accounts have been closed without repayment.
“Their loan repayments could not be traced. No proper explanation was provided by management to explain why the loan accounts were closed before the repayments of the loans,” Gathungu said in her report.
The auditor further unearthed that 808,047 people were given loans totalling KSh 464 million, yet they were unregistered.
In her report, Gathungu said it was impossible to confirm whether the loans were accurate and free from manipulation.
Gathungu further observed that the government had a slim to no chance of recovering more than the KSh10 billion borrowed by hustlers.
She questioned the government’s ability to retrieve the money if borrowers failed to make payments after more than 90 days.
Gathungu stated that there was complete uncertainty over the recoverability of KSh 8.2 billion.
“This could result in loss of public funds,” Gathungu warned.
In response to Gathungu’s findings about the Hustler Fund, the government stated that the problems were caused by mistakes in data extraction, understaffing in the secretariat when the fund was established, and mistakes in note numbering.
A year after the product was launched, Ruto raised loan limits based on borrowers’ credit scores.
The president announced that borrowers with 10 loans saw a 100% limit increase, while those with over five loans experienced a 50% raise in their loan limits.
He clarified that in the past, borrowers had no alternative and felt compelled to seek loans from alternate platforms that imposed significantly higher interest rates.
