The government has moved to clarify concerns raised in the Auditor General’s report regarding Ksh8 billion under the Hustler Fund, which was flagged as unaccounted for in the 2022/2023 financial year.
In a statement issued on Thursday, Principal Secretary for Micro, Small, and Medium Enterprises (MSMEs) Development Susan Mang’eni said the Ksh8 billion in question was not part of the initial Ksh12 billion disbursed into the Hustler Fund by the National Treasury.
Mang’eni explained that the funds had been allocated as counterpart funding to match long-term (pension) savings for Hustler Fund beneficiaries, in line with provisions under the Public Finance Management (Financial Inclusion Fund) Regulations of 2022.
“Contrary to reports appearing in some media, the Ksh8 billion in question, which had been allocated as counterpart funding to match the long-term savings of the Hustler Fund, was NOT drawn down from the National Treasury,” the PS stated.
Savings plan delay
Mang’eni further noted that by June 30, 2023, the period covered in the audit, the Hustler Fund was only seven months old, and the matching savings product was still being developed.
“It would have been imprudent to draw down the money only for it to idle in commercial banks,” she said.
Additionally, she confirmed that Ksh200 million had been allocated to support the operationalization of the Fund.
According to the Auditor General’s report, the State Department spent Ksh12 billion out of the approved Ksh22.96 billion, leaving an unexplained balance of Ksh8.2 billion.
PAC seeks explanation
Mang’eni’s response comes after PS Patrick Kilemi of the State Department for Cooperatives appeared before the National Assembly’s Public Accounts Committee (PAC), where he struggled to provide clarity on the funds’ status.
Kilemi attributed the confusion to transitional challenges during the early phase of the Kenya Kwanza administration, explaining that the Cooperatives Department temporarily handled the Hustler Fund as the MSMEs department was being established.
PAC gave Kilemi two weeks to submit detailed documentation.
Public assurance given
Mang’eni assured Parliament and the public that all necessary records would be submitted within the required timeline.
“We assure the public that the Fund remains committed to its purpose of deepening financial and credit inclusion among the most vulnerable segments of the economy,” she added.
