Audit State loan defaults – Business Daily

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Audit State loan defaults


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The decision by the Kenya Development Corporation (KDC) to pursue debts owed to defunct development finance institutions should serve as a warning to crooked individuals that the law will eventually catch up with them, no matter how long it takes.

Kenya’s economy suffered a great deal due to this blatant abuse of proximity to power, which saw these individuals take up funds that were meant to develop local businesses and employ Kenyans.

It is therefore good to see some effort being made to recoup the funds from their associates and estates.

Equally important though, are the lessons that can be learned on the management of public funds to avoid a repeat of the plunder down the road.

KDC must take stock of the systemic weaknesses that plagued the various financing bodies that were responsible for the bad loans, and put in place safeguards.

The remedial action must also go beyond recovering the loans. Officials of the defunct bodies who approved the loans and turned a blind eye to the defaults must also be put to task.

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