The Uwezo Fund faces possible consolidation with other government affirmative action funds following its failure to adequately respond to critical audit queries raised by the Office of the Auditor General.
The National Assembly’s Special Funds Committee, chaired by Fatuma Zainab, has expressed concern over the fund’s financial management and recovery structures, warning that continued non-compliance could necessitate a broader restructuring of public funds aimed at empowering youth, women, and vulnerable groups.
“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 Zainab during a committee session. “We are now forced to consider merging these funds so that they can operate more efficiently and reduce the risk of financial losses.”
According to the Auditor General’s reports for the financial years 2022/2023 and 2023/2024, Uwezo Fund satisfactorily addressed only three out of ten audit issues raised. Key among the flagged issues was the fund’s inability to recover over KSh 4 billion in outstanding loans during the 2022/2023 period.
The audit further revealed significant under-expenditure, with KSh 193 million going unused despite budgetary allocations. Concerns were also raised about the Fund’s staffing, with only 21 employees—most of them seconded from the State Department—managing operations meant for a team of 70.
In the subsequent financial year, the Auditor General highlighted a growing burden of bad debt, which ballooned to over KSh 5 billion. The report also cited a failure to distinguish between recurrent and non-recurrent receivables, a deficit of KSh 74 million, and an over-expenditure of KSh 58 million, all pointing to worsening fiscal discipline.
The committee also noted that up to 75 percent of disbursed loans remain unpaid, a trend mirrored in both the Women Enterprise Fund and the Youth Fund.
“It is evident that the intention behind these funds was noble, but the reality on the ground is different. Borrowers are defaulting, and we have no viable mechanism for pursuing recovery. If we do not act, we risk writing off billions of shillings,” Zainab said.
The Uwezo Fund has now been given a 14-day ultimatum to provide satisfactory responses to the committee and the Office of the Auditor General. The outcome of this process will determine whether the government proceeds with the proposed fund consolidation.
