• Wednesday, 24 July 2024
KCB Bank Denies Processing Hustler Fund Loans Without IDs

KCB Bank Denies Processing Hustler Fund Loans Without IDs

KCB Bank has denied processing Hustler Fund loans to customers on boarded into the platform without National Identification Cards following a recent audit conducted by the Auditor General exposing irregularities linked to the Fund.

In a letter addressed to the Financial Inclusion Fund Chief Executive Officer Elizabeth Nkukuu in response to Hustler Fund audit queries raised by the Office of the Auditor General, the bank however noted a failure in its IT system.

The bank revealed that the system failed to update customer records over technical errors that could have resulted in the irregularities pointed out by Auditor General Nancy Gathungu.

“On investigation we noted four records were for Safaricom customers while one was for Airtel. The system failed to update their records over a transient technical issue. We note for the Airtel customer (25473****143), they borrowed once and fully repaid, and as at the time of this response, they had no outstanding loan,” said Anastacia Kimtai, KCB Managing Director.

She stated that the bank is working with service providers to identify and update the national IDs of the affected customer profiles after the auditor general shared a file with five records of customers who had been onboarded on Hustler Fund products without national IDs.

The auditor also noted that there were loan IDs that were used to process more than one loan, whereby 867 loan IDs were used to process 1,978 loans amounting to Sh477,928.

“On investigation, we noted that this remained consistent with the product rule of one loan per customer at a time up to their credit limit. These were cases of customers topping up their existing loans, but within their assigned credit limit. For loan top-ups as opposed to new loan requests, the system maintains the same loan contract (loan ID) as a principal increase to the existing loan,” added Kimtai.

In her report, Auditor General Nancy Gathungu raised questions over the Hustler Fund’s non-adherence to loan limits and the configuration of the loan disbursement system.

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