Editor's Review

The PS clarified that the fund’s capitalisation followed a clear structure laid out in existing financial regulations.

Micro, Small & Medium Development Principal Secretary Susan Mang'eni has addressed concerns surrounding the alleged misappropriation of Ksh8 billion from the Hustler Fund. 

In a statement on Thursday, June 19, Mang’eni said the fund’s capitalisation followed a clear structure laid out in existing financial regulations. 

"The initial capitalisation of the Hustler Fund was Ksh20.2 billion, with Ksh12 billion allocated towards lending and Ksh8 billion as counterpart funding to match the long-term (pension) savings for the Hustler Fund beneficiaries, as envisaged in the Public Finance Management (Financial Inclusion Fund) Regulations 2022, article 7 (1)(f). Ksh200 million was an allocation to support the operationalisation of the Fund,” she said.

Amid reports suggesting that the funds could not be accounted for, Mang’eni insisted that the funds were never withdrawn from the National Treasury.

“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,” she added. 

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File image of PS Susan Mang'eni

The Auditor General’s findings for the financial year ending June 2023 reveal that the State Department for Cooperatives Development is unable to provide a clear explanation for the use of the Ksh8 billion in question.

The report outlines that while the department had an approved budget of Ksh22.96 billion for that period, it only spent Ksh12 billion, leaving a discrepancy of Ksh8.2 billion that remains unexplained.

While appearing before the Public Accounts Committee, State Department of Co-operatives Principal Secretary Patrick Kilemi was unable to fully explain how the Ksh8 billion was utilized. 

He attributed the shortfall to disruptions brought about by administrative transitions during the initial phase of the Kenya Kwanza government.

“I was tasked with initiating the Hustler Fund as the State Department for MSMEs was being established. That’s why I received the funds on behalf of that department and now find myself responding to questions about what transpired at the time,” he said.