Kenya: Equity Bank Denies Receiving State’s Missing Sh493 Million

Kenya: Equity Bank Denies Receiving State's Missing Sh493 Million

The fate of Sh654.3 million the State says it lent Equity Bank is unknown after the lender denied receiving any loan from the government in its nearly four decades of existence.

In documents tabled at the National Assembly on April 29, the Treasury says Equity Bank has an outstanding Sh493.47 million government debt from the initial loan of Sh654.3 million.

The bank, however, has disowned the loan deal with the State, raising questions regarding who received the millions of shillings, and casts doubt over recovery of the taxpayers’ cash.

Equity Group CEO James Mwangi told Business Daily that the lender is not aware of the loan, which the Treasury says about a quarter or Sh160.83 million has been repaid.

The loan said to have been advanced to Equity is part of the Sh907.06 billion that the Treasury told lawmakers was advanced to State corporations and other private firms on diverse dates, of which only Sh40.05 billion had been repaid by end of June last year.

The loan is not among the borrowings disclosed by the lender in its annual report, which has been endorsed by the Central Bank of Kenya (CBK).

"I don’t understand. We have never borrowed from government. Maybe there is another Equity but not this one," said Mr Mwangi in an interview.

"We are not denying that we borrow. Like anybody else we borrow, but we don’t borrow from government."

Mr Mwangi explained that distressed banks have a window to borrow from the CBK, adding that Equity has never used the emergency facility.

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