K150M FUNDS LOST

…CEEC fails to recover over K150m empowerment funds in loan revolving funds.

NON

PERFORMING loans amounting to K159, 708, 219 under the Citizens Economic Empowerment Commission (CEEC) have remained static for periods of over nine years and the organisation has failed to recover the collateral pledged for the loans, the latest Auditor General report has revealed.

Included in the total figure are amounts totalling K1, 042, 472 in outstanding loans owed by 23 clients who could not be traced resulting in reduction of the loan revolving fund.

The report indicates that as of December 31, 2019, no action had been taken to recover the funds.

According to the latest report for the financial year ended December 31, 2018, in Paragraph 8 of the Report of the Auditor General for 2014 on the Accounts of Parastatal

Bodies and Other Statutory Institutions, mention was made of non-performing loans in amounts totalling K109, 567, 518 which had remained static for periods of over four years as of November 2015.

The report states that the CEEC had failed to recover the collateral pledged for the loans.

“In their report for the Fifth Session of the Eleventh National Assembly, the Public Accounts Committee urged the Controlling Officer to ensure that outstanding debt was recovered,” the report states.

The report however states that a review of the situation in December 2019 revealed that the non-performing loans had increased from K109, 567, 518 in 2014 to K159, 708, 219 in 2019.

It also states that a scrutiny of individual files and physical inspection of selected projects revealed various weaknesses in the administration of the loans which resulted in failure by loanees to service the contracted loans.

The report indicates that some of the loans were earmarked for investment in black market business, dairy ranching, cassava processing plants, groundnut processing equipment and construction equipment among others.

The Citizen Empowerment Fund promotes the economic empowerment of targeted citizens, citizen empowered companies, citizen influenced companies, citizen-owned companies and gender equality in accessing, owning, managing, controlling and exploiting economic resources, in order to contribute to sustainable economic growth.