Gov’t refutes Auditor General report claiming Ksh.8B in Hustler Fund unaccounted for

The government has dismissed a recent report by the Auditor General indicating that Ksh.8 billion allocated to the Hustler Fund cannot be accounted for, insisting that the money was never disbursed from the National Treasury in the first place.

Principal Secretary for Micro, Small and Medium Enterprise Development, Susan Mang’eni, in a statement issued on Thursday, clarified that the Ksh.8 billion in question was part of a counterpart funding provision meant to match long-term pension savings by Hustler Fund beneficiaries.

“The Ksh.8 billion in question, which had been allocated as counterpart funding to match the long-term savings of the Hustler Fund, was NOT drawn down from the National Treasury,” the PS stated.

“It would have been imprudent for the Fund to draw down the money only to idle in the commercial banks. We finally finalised the development of the savings product, and we undertook the first matching up during the 1st Anniversary of the Fund on 30th November 2023."

The PS now insists the money was never spent and that the fund’s rollout was aligned with program development timelines.

“We note that the Parliamentary Public Accounts Committee has given us two weeks to provide additional information. We assure the public that we will provide the requested documentation,” said PS Mang’eni.

She further pointed out that, since its inception in November 2022, the Hustler Fund has disbursed over Ksh.71 billion to more than 26 million Kenyans under personal, group, and bridge loan products.

The Fund has mobilised Ksh.4.8 billion in both voluntary and mandatory savings, and introduced a behavioural credit rating system ranging from A1 to C3 to help gauge borrowers’ repayment habits.

According to Mang’eni, over 4.5 million beneficiaries are currently scoring within the A and B grades, indicating strong creditworthiness.

The clarification comes amid ongoing scrutiny by the Public Accounts Committee (PAC), which on Wednesday put State Department for Cooperatives PS Patrick Kilemi to task over the whereabouts of the Ksh.8 billion initially reported as unaccounted for in the financial year ending June 2023.

Kilemi, who was overseeing the Cooperatives docket at the time of the Hustler Fund’s inception, admitted to transitional challenges in the early months of the Kenya Kwanza administration, telling PAC that part of the responsibility for implementing the Fund had temporarily been assigned to his department.