PAC summons Microfinance Support Center board over governance issues

The Parliamentary Public Accounts Committee (PAC-Central) has summoned the board of the Microfinance Support Center (MSC), led by Dr. Emmanuel Ariba, over failure to establish a governing policy.

The Auditor General’s report for the financial year 2022/23 criticized MSC for lacking governance and risk control systems, leading to potential losses from funds disbursed to beneficiaries.

According to the chairperson of PAC Central Committee Muwanga Kivumbi, “for the 20yrs Micro Finance Support Centre, has been in existence, they did not have risk control systems to guide them on how much they are supposed to lend to their beneficiaries and which system they are supposed to use to reclaim the loans given out to their clients.”

The report noted that, “MSC failed to utilize fully the released funds, with only 12 billion shillings used out of 70 billion, due to the absence of a policy on Expected Credit Loss (ECL).”

The committee, chaired by Muwanga Kivumbi, ruled that the MSC board and the Ministry of Finance be summoned to appear before the committee.

The Deputy Chairperson PAC central Committee Namugga Gorrreth said, “This is the second time micro finance support centre is appearing before the committee without proper documents.”

Namugga said, “It’s very unfortunate for MSC to have no governing policy on which it uses to lend and reclaim loans from the beneficiaries.”

She alleged that large sums of Emyooga Funds have been mismanaged without any accountability.

The Ministry of Finance has been given six months to establish a governing policy to address the governance and risk control issues.

However the finance manager MSC Sabila Jackson requested the PAC central committee to come up with a detailed reconciliation of the budget.