The Kenya Industrial Estates (KIE) failed to recover a whopping Sh1.4 billion in loans advanced to enterprises, Auditor General Edward Ouko says.
Mr Ouko said KIE only recovered Sh16 million out of outstanding loans of Sh1,370,621,000 in the year to June 30, 2016.
“This translates to a paltry approximately 1.2 per cent of the opening loans balance implying that the colossal amount of outstanding loans are not performing as expected,” Mr Ouko said in a qualified audit opinion of the books of KIE tabled in Parliament by the Leader of Majority Aden Duale.
He said the failure to recover the huge amount of loans is despite the fact that KIE is struggling to break-even in its operations.
Mr Ouko said the KIE management disbursed loans amounting to Sh181,331,500 in the year under review against a target of Sh270 million as stipulated in the budget vide board paper of January 2016.
“Although this has been attributed to the delays in receiving the relevant funding from the national Treasury, the loans turnaround time remains a major challenge to the company (KIE),” Mr Ouko said.
The audit comes at a time when the State has begun the process of consolidating functions of six financial organisations into one body.