Counties

Meru MCAs seek to dissolve bank founded by Munya over bad results

munya

Former Meru governor Peter Munya. FILE PHOTO | NMG

A section of Meru ward representatives have called for the scrapping of the County Microfinance Corporation as well as the investment arm over poor performance.

The microfinance and the Meru County Investment and Development Corporation were key flagship projects by the administration of former governor Peter Munya.

While debating a report on the audit of the Meru County Microfinance Corporation financial statements for 2016/2017, the members of county assembly (MCA)s said the institutions had turned into cash sinkholes of the limited devolved resources.

Public Accounts and Investments Committee chairman Kimathi Ithibua said various issues remained unresolved even after the Auditor-General’s queries.

The committee report on the audit queries cites a weak credit policy, overpayment of board allowances against the Salaries and Remuneration Commission guidelines, unaccounted expenditure of Sh4.8 million, overpayment of Sh84,150 in salaries, and high number of non-performing loans.

The report states that the corporation, which has four branches, collected Sh4.1 million against an outstanding loan balance of Sh47 million between May and June this year.

Abogeta East MCA Mwirigi Karinga said it was a waste of public resources to continue allocating money to a microfinance that is laden by high non-performing loans.

He said the corporation had nothing to show for its years of existence.

“It is time to do away with the microfinance corporation. I will soon table a motion to do away with it. Despite advancing millions in loans, it is yet to break even. The money being channelled to the microfinance can be used for other development projects,” Mr Karinga said.

His Naathu counterpart Samuel Gitonga, said the Assembly should bar further allocation of funds to the corporation until all non-performing loans are collected.

In April an attempt by MCAs to slash funds for the microfinance under the 2018/2019 budget failed after governor Kiraitu Murungi intervened.

“Besides the uncollected loan payments, the staff and board members were overpaid. It seems the corporation has been receiving a blank cheque,” Mr Gitonga said.

Nkuene Ward rep Martin Makasi said those who had been overpaid must be surcharged to recover public funds.