This archive report was first published on 3 December 2019.
On December 3, 2019, the National Assembly's Public Accounts Committee (PAC) ordered the Treasury to close a KCB account holding Sh3 billion for car loans for civil servants.
The committee directed the Treasury to either facilitate the speedy allocation of the car loans or transfer the billions to the government's main account for allocation to other pressing expenses.
Since 2015, the Treasury has been allocating millions to shillings to the car loans fund, which had grown to Sh3.5 billion as at June last year, up from Sh2.83 billion a year earlier.
According to the PAC, the Treasury should roll out the fund to state officers and public officers within three months to achieve the objective of providing motor car loans to civil servants.
However, if this is not possible, the Treasury should withdraw all the money plus interest deposited at KCB and appropriate it into the Exchequer.
The five-year car loan scheme was one of the sweeteners meant to add to the allure of serving in the public service, which has been competing with the private sector for top talent.
Allocation was to be based on job grade, and the loans were to be charged an annual interest rate of three percent.
However, sources at the Treasury have said that demand for the car loans has remained low due to the pay scales that prevent majority of civil servants from benefiting from the scheme.
The Salaries and Remuneration Commission (SRC) approved the car loans that range from a minimum of Sh600,000 to a maximum of Sh10 million for civil servants who qualified for the loans.
