Shorter loan term headache for MCAs months to elections

Majority of members of county assemblies (MCAs) are choking under a pile of debts ahead of the August 8 polls after their repayment periods were reduced by a whole 10 months.

Many county service boards have issued instructions that the loans must be repaid by May instead of March 2018, the latter coinciding with the five-year repayment period for car and mortgage loans of Sh2 million and Sh3 million respectively.

Established in 2014 in the design of what their National Assembly counterparts enjoy, the loans look set to complicate the maths for many MCAs hoarding every coin to finance their campaigns.

The loans that the MCAs fought so hard to get have become their latest source of torment as majority of them risk being locked out of the 2017 race over mass delinquency.

The high ethical standards prescribed in the Constitution mean MCAs may have to furnish the electoral body with Credit Reference Bureau (CRB) clearance to ascertain the fate of loans being rolled out in partnership with commercial banks.

The 2,526 ward representatives countrywide borrowed at least Sh12.6 billion or Sh2 million per person for cars and Sh3 million for mortgages.

READ: Counties stand to lose millions in loans to MCAs

“This (insisting on full repayment before election) has inconvenienced most of us because more money is already going to servicing the loans leaving us with very little in our accounts,” said Kondele Ward Representative Gabriel Ochieng.

“I cannot afford to miss any sitting in the assembly even if I have serious engagements because it is through the allowances that I can earn more money to repay the loans,” said Mr Ochieng.

In Vihiga County Assembly, for instance, a preliminary auditor’s report for the year ending 2016, indicated that 40 MCAs still owe banks a total of Sh79.8 million. This would mean each MCA faces a pay slip deduction of Sh200,000 per month to clear their loans.

And while County Assembly of Siaya had approved the award of Sh233 million to its members as mortgage and car loans, six members had not started repaying.

Auditor-General Edward Ouko has also raised concerns that the loans might not be fully recovered within the remaining period of the assembly, which should be dissolved three months before the elections.

According to Mr Ouko, Kisumu, Siaya, Homa Bay, Vihiga and Busia for instance, gave members Sh397.2 million as loans for cars and mortgage in 2014 without setting up teams to oversee and manage the processes, against the law.