Uwezo Fund enlists chiefs to recover Sh4.6 billion

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 youth, women and people living with disabilities (PWDs) boost their enterprises through cheap credit, says over the past four years, the 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.

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Uwezo Chief Executive Officer Peter Lengapiani said cumulatively, the fund’s beneficiaries have repaid Sh2.5 billion.

This leaves about Sh4.6 billion still in the hands of various groups across the country.

“The board has operationalised guidelines on loan repayment strategies which include demand letters and re-commitment letters to defaulting groups, enlisting the support of national government administrative officers and close monitoring of beneficiary groups,” said Mr Lengapiani.

“These strategies have been operational since 2018 and have resulted in a significant improvement in loan repayment from 34 per cent in 2018 to 39.45 per cent in March 2022,” he said.

Mr Lengapiani said since inception, the fund has disbursed to 79,216 groups (50,794 women groups, 26,401 youth groups and 2,021 groups of persons with disabilities) in all the 290 constituencies as loans.

Misconstrued for free cash

The fund says initially it had experienced a challenge where it was misconstrued to have been set up to issue free cash, a reality that made groups fail in repayments but added that it has been conducting public education that has improved repayment rates.

According to the CEO, in some constituencies where financial institutions haven’t penetrated, groups have had challenges repaying though they are willing, thus it is planning to roll out a paybill number for repayment purposes.

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“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 sensitise loan beneficiaries on the importance of loan repayment,” the fund said.

Two levels

The Uwezo Fund is operationalised at two levels, the fund’s secretariat and the constituencies. The secretariat disburses funds through the constituencies bank accounts maintained for every constituency as provided for in the Uwezo Fund regulations section 19. The funds are then 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.