NAIROBI, Kenya — Senators are raising alarm over billions of shillings in unpaid county empowerment loans, warning that the funds may have been turned into political slush money during election campaigns.
The Senate County Public Investments Committee (CPIC) has been grilling governors over ballooning non-performing loans under various county funds, which were meant to support youth, women, and small enterprises.
Committee chair Godfrey Osotsi said evidence suggests most loans were issued close to election periods, with some possibly financing campaigns.
“What is becoming clear is that this money was being disbursed during election periods, and in some cases, it was probably used to campaign against you,” Osotsi told Kitui Governor Julius Malombe.
The committee has asked the Controller of Budget to prepare a detailed report on all county empowerment funds, including amounts disbursed, loans issued, and balances outstanding.
Senators also urged the Ethics and Anti-Corruption Commission (EACC) to take up investigations.
Billions at Risk Across Counties
Busia Governor Paul Otuoma admitted the county is struggling to recover Sh130 million under three funds, including the Agricultural Development Fund and the County Cooperative and Enterprise Development Fund.
The loans, Auditor-General Nancy Gathungu observed, were unsecured because the establishing laws did not require collateral.
“These were inherited loans. We have stopped further disbursements until the legal gaps are fixed,” Otuoma said.
In Turkana, Governor Jeremiah Lomorukai acknowledged over Sh500 million lent out in previous years remains unpaid.
He said a new Loan Management System was being introduced to enhance oversight and repayment tracking.
Kitui County faces Sh157.31 million in unpaid loans under its Empowerment Fund.
Malombe admitted political actors in the previous administration had directed residents not to repay, adding: “We are not giving out any more loans.”
Other counties are also on the spot.
- Bungoma: Sh28.19 million pending under disability and youth funds.
- Laikipia: Sh47.22 million unrecovered loans.
- Mombasa: Sh53.88 million unpaid under the Consolidated Revolving Fund, with no evidence of collateral.
- Meru: Sh28.20 million still outstanding under its County Investment and Development Corporation Fund.
Senators Cry Foul
Senator Raphael Mwinzagu accused Kitui of “intentionally ignoring” its own recovery laws, while CPIC members warned that continued laxity was undermining the purpose of empowerment funds.
“Even if we allowed you to pursue recovery, you would still come back and report that nothing has been recovered,” the committee told governors.
The senators said the trend points to deliberate misuse of empowerment funds to win political favour, leaving taxpayers to absorb the losses while the intended beneficiaries remain unsupported.
