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Fraud

Donor Fraud: Equity Bank Mismanaged Ksh500 Million with The Blessings of DFID and GoK

James Mwangi, Equity Bank CEO who has learnt the ropes of the cartel world and wants to be head of the bank till death do them apart.

One of the most corrupt and ‘don’t care’ bank in Kenya is Equity Bank of Kenya. It has recently celebrated 35 years of existence.

Founded in 1983, the bank concentrated on the on this poorer segment of the retail

banking market since 1984 and revolutionized the banking industry in Kenya.

In those years, Kenyans have seen the worst of the so-called revolutionary lender. It is hard to imagine that the level of theft happening at the once touted as the bank that brought Kenyans from the ‘mattress banking’ into the mainstream one, can just go on and not acted upon by the Central bank of Kenya (CBK).

Equity has over the years fallen short of being a great bank by many standards, yet over 14 million Kenyans (as per 2019 figures) chose to bank there for reasons mostly due to ignorance, the other reasons are a classic Kenyan case: Tribalism and corruption.

Why corruption? It is easy to get jobs, favor and everything if you are from a certain tribe in this country.

Now, that’s not the point

The point is: Equity Banks’ Special Projects Director, Mr. Allan Waititu, should explain how the bank opened over 20,000 accounts for beneficiaries without the required Know Your Customer (KYC) verification.

Thousands of beneficiaries in the Arid and Semi-arid areas were opened for accounts in order to enable them to receive the Hunger Safety Net Programme Cash transfer monies.

ALSO READ: Equitel: The Weakest Link In Equity Bank’s System, Conmen Are Having A Field Day

The programme

In December 2007, Financial Sector Deepening – Kenya (FSD Kenya) issued a Terms of Reference (TOR) requesting expressions of interest (EOI) for a pilot project to distribute cash payments to 60,000 beneficiaries in the most remote parts of northern Kenya. FSD Kenya was a specialist development programme originally established by the UK government’s Department for International Development (DFID) to provide a continuing mechanism through which donor agencies in Kenya could pool their efforts to support the development of inclusive financial markets. In addition to DFID it was funded by the Swedish International Development Agency (SIDA), World Bank, Agence Francaise de Developpement (AFD) and the Gates Foundation. Because of its local expertise and experience in financial service development, FSD Kenya was asked by DFID to take responsibility for developing a solution to the payments element of HSNP. FSD undertook a long process of market preparation before issuing an open call for tenders to provide payments services. The continuing objective of the HSNP was to deliver long-term guaranteed cash transfers to chronically food-insecure households. The pilot programme was aimed at 60,000 households in the four northern districts of Turkana, Marsabit, Mandera, and Wajir.

Then Equity Banks Special Project person was Paul Waihumbu.

As of 2014, the HSNP was hailed as a success despite the many challenges. However, what was not being paid even by the many reports online, some of which have been deleted, by the respective donors was how in a third-word country, the banking laws never really work.

Many Kenyans were scammed to open accounts without valid National Identity Cards (ID) but were later denied to withdraw monies from those accounts that were opened for them.

Deleted evidence

It seems Equity bank, either (i) just wanted to meet the threshold of beneficiaries set out by FD and UKAid/DFID or (ii) they just knew that there was a chance for them to make money. And as long as the monies remained in those accounts the bank’s senior managers can use it for other purposes.

‘It is a pity that most of the Ksh500 million shillings set aside for the cash transfer project is still held at Equity accounts. And I know for some of the managers who are using that money for personal gain’, said our source on condition of anonymity

For a project that started to disburse funds in 2014, most of the beneficiaries in Phase 2 of the project, have not received their monies as of 2019. The beneficiaries in phase 1 received their monies because they were on a smart-card kind of a system.

ALSO READ: INIQUITY BANK: Equity Bank Steals Ksh2 Million From A Sick Grandmother

The mismanagement of the Ksh500 million kitty should be something that cnyakundi.com calls upon the CBK, EACC and DCI to investigate.

Those answerable are flouting banking codes and stealing funds are:

  1. The National Drought Management Authority
  2. Officials at the UKAid and Department for International Development (DFID)
  3. Senior Managers at Equity bank (James Mwangi, Paul Waihumbu and Allan Waititu)

Donors have colluded with Kenyans to bend the banking rules and in turn, use the weakness if the system to hold monies in bank accounts that cannot be accessed due to KYC issues that they created and they are using the monies to do business with.

Some of these projects are not that great in terms of what the Terms of Reference say. Poverty still rages in the counties where the projects

Deleted.

‘The project was badly thought-out, there’s no impact on the ground because whatever that has been used; has catered mostly on administrative costs by Equity bank and NDMA’, said our source

As it stands over Ksh100 million cannot be accounted for.

How does DFID plead?

ALSO READ: Donor Fraud: International AIDS Vaccine Initiative – Chapter 1 of 3

Other case of fraud in the cash transfer schemes in Kenya

It is not the forst time that this site is raising serious issues of mismanagement of donor funds, some of which we are supposed to pay back as a county.

Even still, why would the donors remain silent while we expose this?

The World Bank led cash transfers namely: Kenya Youth Employment and Opportunities (KYEOP), Cash Transfer for Orphans and Vulnerable Children (CT-OVC) and the Cash Transfer for the Elderly have all been misused and the beneficiaries haven’t received anything.

Fr the CT-OVC, a source tell me that some of those Orphans are well-off families linked to people working at the ministry f Health, others are now grown and moved on but the families that used to host them still receive those monies.

The accountability in this cash transfer scheme is zero and curiously the donors don’t care.

ALSO READ: Donor Fraud: How World Bank Funds Are Diverted To Personal Pockets

If you are working at Equity, Ministry of health, Ministry of Labour and social protection and are not happy with the way cash transfer funds is being used. Reach us on [email protected] or WhatsApp 0710 280 973


Would you like to get published on this Popular Blog? You can now email Cyprian Nyakundi any breaking news, Exposes, story ideas, human interest articles or interesting videos on: [email protected] Videos and pictures can be sent to +254 710 280 973 on WhatsApp, Signal and Telegram.


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