EDITORIAL: Review car loan scheme

Most civil servants earn too little to qualify
Most civil servants earn too little to qualify for the car loans. FILE PHOTO | NMG 

The finding that the government’s car loans fund for civil servants has been lying idle should cause a rethink of the incentive programme. The National Assembly’s Public Accounts Committee has revealed that the fund has been piling up unused, with KCB holding Sh3.5 billion as of June last year.

It has emerged that most civil servants earn too little to qualify for the car loans. This is based, among other factors, on the law that requires an employee to take home at least one third of his or her salary after the employer has made all the necessary deductions. Highly-paid government workers, who would ordinarily make use of the car loans, have little incentive to take advantage of the fund since the State provides them with official cars to conduct their work. This shows that the fund needs to be scaled down considerably, if not scrapped at all. At a time when the government is facing a cash crunch that has seen it raid various parastatals’ coffers, it does not make sense to have billions of shillings locked up in a fund that is not serving its purpose.

Indeed, as the parliamentary committee noted, the government should make the necessary changes to boost uptake of car loans or withdraw the monies and redirect them to other pressing needs.