Safaricom and the KCB are emerging as some of the biggest beneficiaries of the Hustler Fund after handling about 90 percent of the Sh12 billion released for lending.
Out of the Sh12 billion the Treasury disbursed for the Financial Inclusion (Hustler) Fund seed capital late last year, KCB received Sh10.46 billion, and Sh1.54 billion was handled by Family Bank.
The two lenders were to distribute the cash among telecom firms for onward lending to millions of Kenyans through mobile phones.
“Subsequently, the State Department for Co-operatives disbursed an amount of Sh9.46 billion and Sh2.54 billion to KCB and Family Bank, respectively, for onward transmission to three telecommunication companies for onward lending to eligible persons.
“Records provided by KCB indicated that an additional amount of Sh1 billion was received from Family Bank, bringing the total funds at KCB Bank to Sh10.46 billion,” a special audit by the Auditor-General notes.
The audit reveals that while KCB handled 87.2 percent of the funds released by the government for the Hustler Fund, Safaricom also dominated other telcos in lending to Kenyans.
Out of the Sh9.6 billion that KCB released to telcos, Safaricom handled Sh9 billion, equivalent to 93.8 percent of the cash released.
“Out of the total amount received by KCB, the amounts of Sh9,042,979,000, Sh540,349,661, and Sh51,692,891 were transmitted to Safaricom, Airtel, and Telkom, respectively, all totalling Sh9,635,021,552, leaving a balance of Sh824,978,448 in the KCB account,” the Auditor-General stated.
“Family Bank confirmed having received an amount of Sh2.54 billion out of which an amount of Sh1.54 billion was transmitted to Safaricom while an amount of Sh1 billion was transmitted to KCB,” the report notes.
Kenyans have been accessing Hustler Fund loans charged at eight percent through the telcos that act as the link between banks and borrowers.
Equally, the funds a bank receives from the government give it leverage to lend more, thus raising its revenues.
The Fund was established in November last year to offer financial services and products that are affordable, accessible, and appropriate for the unserved and underserved.
