MPs accuse Treasury of illegal trading

April 21, 2011 12:00 am

, NAIROBI, Kenya Apr 21 – The Treasury is on the spotlight after two MPs claimed that Sh3.8 billion meant to boost micro and small enterprises has been diverted to some commercial banks.

Industrialisation Assistant Minister Ndiritu Muriithi and Kinangop MP David Ngugi say cartels within the government are lending the money to commercial banks at six percent and later loaned to the public at between 14 to 16 percent interest.

“Where is the rationale and benefit if it not a scheme by some cartels? It is sinful, it is immoral and it is wrong. We have raised the issue with higher authorities but we have had no success in having the programme relooked afresh,” he said.

The MPs claimed that the fund which is drawn from taxpayers’ money was not directly benefiting the SME Sector as it was envisaged.

Mr Muriithi said that they had presented their complaints to both Finance Minister Uhuru Kenyatta and Permanent Secretary Joseph Kinyua but no action has been taken so far as the money continues to benefit a few individuals.

Mr Ngugi, on his part, said instead of lending to commercial banks, the money should have been channelled to those in the SME Sector through institutions such as Kenya Industrial Estates and Industrial and Commercial Development Corporation.

“It is a scheme that beats any known economic logic,” he said. The sector is a direct source of livelihood for more than eight million Kenyans.

The Sh3.8 billion fund was officially launched by the government on March 14 at the Treasury in Nairobi.

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