Affirmative action fund, Uwezo, is enlisting the support of chiefs and engaging youth groups across the country, to enhance repayment of Sh4.6 billion issued to support enterprises across the country.
The Fund, established by the Jubilee government to support groups of youth, women and People Living with Disabilities (PWDs) boost their enterprises through cheap credit, says over the past four years, the new measures have seen credit repayment by groups go up by five percentage points.
Set up in 2014, Uwezo has disbursed over Sh7 billion through its constituency offices, with the beneficiaries having repaid Sh2.5 billion, representing a repayment rate of 39.5 percent.
This leaves about Sh4.6 billion still in the hands of various groups across the country, part of which the fund is implementing strategies to see repaid.
“The Board has operationalized guidelines on loan repayment strategies which include demand letters and recommitment letters to defaulting groups, enlisting the support of National Government Administrative Officers and close monitoring of beneficiary groups,” said Uwezo chief executive officer (CEO), Peter Lengapiani.
“These strategies have been operational since 2018 and have resulted in a significant improvement in loan repayment from 34 percent in 2018 to 39.45 per cent in March 2022.”
Mr Lengapiani said since inception, the fund has so far been disbursed to 79,216 groups - 50,794 Women group, 26,401 youth group and 2,021 groups of persons with disabilities - in all the 290 constituencies and also trained all beneficiary groups
The Fund says initially it had experienced a challenge where it was misconstrued to have been set up to issue free cash, which prompted defaults.
It has been conducting public education that has led to improved repayment rates.
The CEO said some constituencies where financial institutions haven’t penetrated, groups have had challenges repaying. The Fund plans to roll out a pay bill number through which borrowers can repay the laons.
“The Fund management has taken judicious measures to have loan beneficiaries repay the loans advanced to them. Further, the Fund has initiated pay bill as an alternative mode of loan repayment aimed at bridging the financial infrastructural accessibility gaps as well as enhancing the convenience in loan repayment,” Mr Lengapiani said.
Among constituencies where repayments have been high across the country are North and South Imenti, Taveta, Runyenjes, Mathira, Ndia, Voi, Keiyo North, Eldama Ravine, Mvita, Njoro and Ugunja.
“Committees in various constituencies continue to mount efforts towards reconciliation of loan records, work closely with chiefs to follow up on loan repayment and at the same time sensitize loan beneficiaries on the importance of loan repayment,” the fund stated.
The Uwezo Fund is operationalized at two levels, the Fund’s Secretariat and the constituencies. The Fund’s Secretariat disburses funds through the constituencies bank accounts maintained for every constituency as provided for in the Uwezo Fund regulations section 19 where the same funds are loaned by constituencies to beneficiary groups
Loan disbursement and repayments are undertaken at the constituency levels, spearheaded by the respective constituency secretariats that oversee its day-to-day operations. The identification and appraisal of potential loan beneficiaries is undertaken by the respective Constituencies Uwezo Fund Management Committees.
