Auditor General Nancy Gathungu has uncovered a shocking anomaly in the management of the Husler Fund, revealing that loans amounting to Ksh31 million were disbursed to Kenyans under 18 years of age.
In her annual report on National Government Funds for the 2023/2024 Financial Year, Gathungu detailed two instances where loans were granted to individuals who were legally ineligible.
Loans to ‘Future’ Born Individuals
One particularly alarming case revealed that loans were credited to individuals who, according to records, were born in the future. Despite the audit period covering disbursements between July 2023 and June 2024, some beneficiaries had birthdates ranging from July 1, 2024, to December 31, 2073.
According to the report, Ksh31,135,690 was credited to accounts registered on Safaricom, Airtel, and Telkom. Additionally, Ksh681,395 was issued to Kenyans aged between 10 days and 18 years.
Concerns Over Loan Recovery
The audit raised serious concerns about the ability of President William Ruto’s government to recover these loans.
“The records are therefore unreliable, and the resultant data in the systems may not have adequate controls. In these circumstances, loan agreements with underage individuals are potentially unenforceable and increase the likelihood of default,” the report read in part.
Rising Non-Performing Loans
The report also highlighted a significant level of non-performing loans. At the time of the audit, outstanding loan repayments had reached Ksh8 billion—equivalent to 64% of the total loans disbursed.
In another troubling revelation, it was discovered that some accounts were closed after receiving loan disbursements.
“A review of loan accounts revealed that 1,041 Safaricom loan accounts, whose principal amount had not been fully repaid, were closed. The loans disbursed amounted to Ksh1,465,515, but were closed after repayment of Ksh646,870, leaving a balance of Ksh818,645, which ought to have been collected before closing the accounts,” the auditor reported.
“Further, there were thirty (30) loan accounts with a total of Ksh598,987 that were closed without repayment of the loan balances.”
Call for Accountability
The audit findings raise serious questions about the integrity of the Husler Fund’s loan disbursement and recovery systems. Authorities are now under pressure to address these loopholes and ensure stricter oversight to prevent financial mismanagement in government-backed funds.
Stay updated for further developments on this story.
