NAIROBI, Kenya – The Uwezo Fund is staring at possible consolidation with other government affirmative action initiatives after failing to respond adequately to critical audit queries flagged by the Auditor General.
The National Assembly’s Special Funds Accounts Committee has raised red flags over the fund’s financial mismanagement and ineffective loan recovery mechanisms, warning that unless urgent reforms are undertaken, the fund may be merged with others such as the Youth Enterprise Fund and Women Enterprise Fund.
“The structures in place are too weak to ensure accountability. Loans are disbursed without a robust system for tracking repayments, making recovery almost impossible,” said Committee Chairperson Fatuma Zainab during a parliamentary session.
“We are now forced to consider merging these funds to improve efficiency and protect taxpayers’ money.”
According to the Auditor General’s reports for the 2022/2023 and 2023/2024 financial years, Uwezo Fund satisfactorily addressed only three of ten audit concerns.
Among the unresolved issues was the failure to recover over Sh4 billion in loans disbursed in the 2022/2023 period.
The audit also flagged massive under-utilisation of allocated resources. In the same financial year, Sh193 million remained unused despite budgetary approvals.
Further scrutiny revealed that the fund operates with only 21 staff—most of them seconded from the State Department—against an approved structure of 70 personnel.
Things worsened in 2023/2024, with the Auditor General warning that the fund’s bad debt portfolio had grown to over Sh5 billion.
The audit cited poor classification of receivables, a KSh 74 million deficit, and over-expenditure of Sh58 million—signs of deteriorating fiscal discipline.
MPs also expressed concern over the fund’s inability to enforce repayment, with data showing that up to 75 percent of disbursed loans remain unpaid.
Similar trends were reported in the Youth and Women Enterprise Funds, prompting calls for a more unified approach.
“It is evident that the intention behind these funds was noble, but the reality on the ground is different,” Zainab said. “Borrowers are defaulting, and we have no viable recovery mechanisms. If we do not act, we risk writing off billions of shillings.”
The committee has now issued a 14-day ultimatum for the fund’s management to provide comprehensive responses to the Office of the Auditor General.
The outcome of the probe will guide the government’s next steps, including whether to dissolve or consolidate affirmative action funds into a single, more accountable framework.
