Parliament Orders Arrest of Top Microfinance Support Centre Officials Over Shs63.57 Billion Loan Write-Offs

The Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has issued a warrant for the arrest of key officials from the Microfinance Support Centre Ltd (MSCL). The committee, led by MP Muwada Nkunyingi, seeks to have the Executive Director, Mr. Peter Mujuni, and the accounting officer produced before them by Friday afternoon.

This drastic action follows the officials’ failure to appear before the committee as scheduled to address concerns raised in the Auditor General’s report for the financial year ending December 2025. A significant point of contention is the writing off of loans totaling Shs63.57 billion, comprising Shs48.61 billion in conventional loans and Shs14.96 billion in investment financing receivables. The Auditor General noted that these write-offs negatively impacted MSCL’s financial performance, contributing to a loss of Shs22.67 billion.

Further issues highlighted by the audit include significant delays in loan processing, with some applications taking over a year to be disbursed instead of the prescribed 31 working days. The report also questioned the use of outdated collateral values for loans worth Shs6.52 billion, some of which were valued up to nine years prior. Additionally, the utilization of funds intended for on-lending was found to be low, with only Shs23.42 billion disbursed out of a planned Shs44.7 billion for the financial year.

COSASE has also summoned the Minister of Finance, Planning and Economic Development, and other relevant ministers to appear alongside MSCL officials. Mr. Nkunyingi stated that the committee would not tolerate any attempts to shield entities from accountability, referencing a perceived history of MSCL evading parliamentary scrutiny.

MPs suggested freezing the entity’s accounts and potentially recommending the dismissal of management if they continue to evade accountability. Efforts to obtain a comment from MSCL were unsuccessful at the time of reporting.

Source: Daily Monitor (Uganda)