The lender had advanced Sh45.2 million to entrepreneurs to set up information hubs across the country
Revelations by the National Assembly Public Investments Committee on Commercial Affairs and Energy over failure to recover Sh45.2 million ‘Pasha Loans’ has placed the chief executive of Family Bank Rebecca Mbithi on the spot.
The Committee led by Pokot South MP David Pkosing met the lender’s CEO, as part of an ongoing probe into circumstances leading to the onboarding of the lender by Information, Communication Technology Authority (ICTA) to advance the said loans on November 3, 2010.
Controversies surrounding non-recovery of the loans are part of the audit queries raised by the Auditor General’s report for the agency’s books for Financial Years 2018/2019 to 2020/2021 – there were doubts on recoverability of the pending loan repayments, as ICTA had already terminated its contract with the Bank before recovery or the money.
“Was this a deliberate scheme to sink taxpayer’s money, and why is this trend so common in loans advanced by the Government?” Pkosing asked.
During her presentation, Ms. Mbithi explained that the bank had hit a dead end in recovery of the money as some of the businesses to which the loans were advanced had already closed shop making it impossible to liquidate their assets to recover the debts.
According to the ICTA-Family Bank Contract, the government agency was to pay any advances still outstanding. While the contract also bound the bank to vet applicants for approval by ICTA, before advancing the loans, the loans advanced to start-ups were not secured.
Members also questioned the process leading to the selection of the bank for the partnership with ICTA.
Email your news TIPS to Editor@nairobilawmonthly.com, and to advertise with us, call +254715061658 anytime of the day
