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Economy

Queries as idle civil servants’ car fund at CBK hits Sh3.5bn

Central Bank of Kenya
Central Bank of Kenya. FILE PHOTO | NMG 

More than Sh3.5 billion meant for public servants’ car loan scheme is lying idle at the Central Bank of Kenya (CBK), the Auditor-General has revealed.

Auditor-General Edward Ouko said the car loan benefit for State officers and other public servants has not disbursed loans since it was established in January 2015, arguing the billions should have been channelled to other items.

The Treasury has since 2015 been allocating millions to funds, leaving the car loan fund with Sh3.5 billion as at June last year, up from Sh2.83 billion a year earlier.

The five- year car loan is seen as one of the sweeteners that should add to the allure of public service, which in recent years has been competing with the private sector for top talent.

The car loan depends on job grade and comes with annual interest rate of three percent — which is lower compared to the average lending rate of 13 percent.

Mr Ouko has put the Treasury on the spot for failing to put into operation the State Officers and Public Officers Motor Car Loan Scheme Fund.

“However, the fund management has not undertaken any activities since then but the National Treasury continues to transfer money to the fund account,” Mr Ouko said in a qualified audit opinion tabled in Parliament.

The idle cash comes in a period when the government is struggling to balance its expenses amid below target revenue collection.

Mr Ouko says the amount could have been used for other more deserving cases.

Kamau Thugge, the Treasury principal secretary said CS Henry Rotich appointed a secretariat under the watch of acting CEO Margaret Muiru.

“The fund is in the process of developing a Web-based system to support online application of the Car Loan. It is envisaged that the system will allow the targeted officers to apply for the loans from their work stations,” Dr Thugge said.

The fund has since engaged KCB Group to help manage the scheme.

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