Mismanagement & Irregularities Mar Emyooga Grant Disbursement – Parliament Report Reveals

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KAMPALA – The Microfinance Support Centre (MSC) came under scrutiny after failing to absorb a total of shs21.2 billion of the Emyooga grant in the Financial Year 2021/2022, as reported by the Auditor General.

 

In his report to Parliament, the Auditor General highlighted that shs100 billion was earmarked for SACCOs under the Emyooga programme, but only shs78.8 billion was disbursed.

 

A meeting was convened with MSC officials by legislators from the Public Accounts Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) on Tuesday, 25 July 2023, to inquire about the mishandling of the funds.

 

During the meeting, Hon. Roland Ndyomugenyi, Member of Parliament for Rukiga County questioned MSC officials about their failure to fully utilize the allocated funds. He emphasized that a budgetary allocation should be spent as intended to avoid depriving other sectors of much-needed resources for service delivery.

 

Hon. Muwada Nkunyingi, Member of Parliament for Kyadondo County East) raised concerns about delayed support to SACCOs, including slow registration processes, which hindered their timely access to funds. He criticized the bureaucratic process of identifying beneficiaries and the subsequent disappointment of communities upon learning that the funds were not fully utilized.

 

Nkunyingi further expressed doubts about the competency of MSC’s loan officers and urged the officials to explain the measures put in place to ensure the intended beneficiaries receive the funding they deserve.

 

Hellen Masika, the Deputy Executive Director at the Microfinance Support Centre, attributed the incomplete absorption of Emyooga funds to a prolonged verification process. She clarified that the funds were meant for certified SACCOs, but the verification delay led to delayed access.

 

Committee Chairperson, Hon. Joel Ssenyonyi, also questioned the disbursement of four loans totaling shs4.1 billion without proper loan appraisals, suggesting potential irregularities or favoritism in the process.

 

According to the Auditor General’s report, MSC overlooked assessing the financial performance of SACCOs that applied for loans in the year under scrutiny. The report revealed that shs3.7 billion was disbursed to clients without vital documents, and shs1.3 billion was advanced without collateral.

 

Masika explained that the hasty loan disbursements were due to varying levels of experience among newly recruited staff. However, she assured the committee that continuous training had improved this weakness.

 

Hon. Nathan Itungo Member of Parlianment for Kashari South County referred to section 4.5 of the Microfinance Support Centre Credit and Operations Manual 2017, which outlines the areas of focus during the loan due diligence process, including security for collateral. He expressed dissatisfaction with the explanation that new loan officers failed to follow the guidelines.

 

Nwoya District Woman Representative, Hon. Judith Achan, expressed concerns about possible fraud and connivance at MSC that might have facilitated the irregular loan disbursements.

 

The meeting concluded with the committee urging MSC to address the shortcomings and ensure transparency and adherence to established guidelines in the future disbursement of funds. Further investigations were recommended to ascertain any potential irregularities in the handling of the Emyooga grant.