Kiambu stares at huge loss as MCAs fail to repay loans

Kiambu’s county assembly might not recover fully the Sh130 million loaned out to MCAs to buy cars and houses.

Assembly Clerk John Mutie told the Senate Public Accounts and Investment Committee yesterday that the  MCAs had only repaid a small fraction of the amount in the last three years, yet the elections are only about 14 months away.

Mr Mutie revealed that some of the MCAs had even defaulted on payment, while 18 others had failed to surrender their collateral to the assembly and hence could fail to repay the loans, especially if they were not re-elected.

Committee members were shocked to learn that the clerk allowed the MCAs and other assembly staff who qualified for the loans to secure the same and peg repayment on allowances as opposed to salaries.

Public funds

“By the time we started this programme and committed Sh130 million to these loans, majority of the members had already secured loans from banks using their pay slips. We agreed that they would repay using the allowances,” explained Mutie.

The senators questioned the rationale of pegging the repayment on allowances.

“It does not make sense that you could agree to this kind of an arrangement and expect that the loan will be repaid before the end of the term.

“This is something that could easily land you in jail, unless you are able to have these members repay the loans. These are public funds,” warned Committee Chairman Anyang Nyong’o (Kisumu).