Nairobi — The Nairobi County Government has been put on spot over an outstanding loan facility of Sh3.7 billion from the Kenya Commercial Bank.
Arising from the audit query, members of the County Public Accounts Committee sought to get clarification on the details of the loan whose interest has accrued immensely.
Appearing before the County Public Accounts Committee, Kenya Commercial Bank Chief Executive Officer Joshua Oigara said that the county has not made any efforts to settle the debt hence the continued rise in interest.
"The county has been in default since day one because the interest charged has been increasing as per the agreement reached," he stated.
According to the CEO, The County Government entered an agreement with the bank seeking help to offset a Sh2.4 billion loan the defunct Nairobi City Council had acquired from Equity Bank.
The amount has since skyrocketed from Sh2.4 billion to Sh3.7 billion as a result of the interest.
KCB reached an agreement through a Memorandum of Understanding (MOU) to provide banking services as well as any other financial services.
Oigara said that the loan has been in default since day one in February 2016 when the payments were supposed to take effect.
Committee members questioned whether the acquisition of the loan facility was approved by the County Assembly as required by the law.
Oigara acknowledged that a public loan has to be approved by the Assembly but agreed that the County Government did not follow the agreed modalities upon which the loan was to be paid.