Broke County govt begs for permission to borrow from KCB
29 July 2015, 16:25
Vihiga - Vihiga County Government is pleading with the County Assembly to allow it to borrow KES 200 million from Kenya Commercial Bank (KCB) to enable it to run its services after running broke.
In a letter dated July 20 and sent to Speaker Dan Chitwah, the acting finance executive Tom Luvisi pleaded with the assembly to approve its proposal to borrow the money.
The letter explained that the County administration decided to borrow as they wait for the disbursement of the 2015/16 funds from the national treasury.
The county's 2015/16 budget of KES 4.5 billion was approved by the assembly on June 30 but is still awaiting the nod from Commission for Revenue Allocation.
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on Tuesday, Speaker Chitwah directed the committee on Finance to look into the proposal and immediately report back to the House.
"The Finance executive has asked the assembly to authorise the county to borrow Sh200 million from KCB to enable county operations to proceed as we await disbursements of the 2015/16 funds," Chitwah told the assembly.
He added that the law allows borrowing by county governments.
“The law further says the assembly should first approve such borrowing and the loan be repaid within a year," he said.
The Speaker noted that the assembly would consider the proposal and make its decision basing on the report to be brought to the house by the Finance Committee.
If the proposal to borrow the KES 200 million is approved by the 39 member assembly, the money would be used to pay July salaries that total to KES 100 million and enable other county government functions proceed uninterrupted.
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