The Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has rejected responses by Microfinance Support Centre Limited officials to audit queries, accusing them of failing to back up their explanations with substantive evidence.
The officials led by the Accounting Officer Mr Edward Sengonzi Damulira, Under Secretary and Accounting Officer Ministry of Finance, Planning and Economic Development, Mr John Peter Mujuni, the Executive Director, Uganda Microfinance Support Centre and board members had appeared on August 28, days after COSASE issued arrest warrants against them for failing to honour an earlier summons without any formal communication.
They had appeared to respond to queries raised in the Auditor General report of 2025 and apologised for their failure to honour the previous summons.
The committee chaired by Mr Muwada Nkunyingi then accorded them time to submit their responses before they were interjected to table substantive evidence to back up their explanations.
“Your issues are substantive, but we want you to submit your response formally with any enabling evidence, which will give the committee good time in thoroughly interrogating your matter,” Mr Nkunyingi said.
He added: “We cannot imagine that these figures are not backed up by substantive evidence.”
The committee’s deputy chairperson and Kira Municipality MP, George Musisi told the officials that the committee needed evidence of the actions they claimed to have taken in response to the highlighted concerns.
“We want you to help us understand by indicating something that you have done. We prefer to deal with some bit of evidence than just verbal. If your document would be backed up by evidence, it would be helpful to you and the committee,” he said.
The officials had been summoned to respond to a number of concerns raised by the Auditor General, including the write-off of loans amounting to Shs63.57 billion.
The audit also reported an expansion of loans worth Shs48.61 billion in conventional loans and Shs14.96 billion in investment financing receivables.
The transactions, according to the Auditor General, affected the entity’s reported financial performance for the year ended June 2025 and contributed to a loss of Shs22.67 billion.
The Auditor General further found that 17 loans worth Shs7.78 billion disbursed during the financial year exceeded the maximum processing period prescribed by the Microfinance Support Centre’s Credit and Procedure Manual of 2022.The manual provides that the entire loan processing period, from application to disbursement, should not exceed 31 working days.
However, the audit found that some applications took more than a year to process.
The Auditor General warned that such delays could negatively affect clients’ businesses, expose the institution to reputational risks and increase the possibility of loan diversion because borrowers could receive funds long after the purpose for which they applied had changed.
The audit also questioned the continued use of outdated collateral values in calculating expected credit losses.Collateral values for loans worth Shs6.52 billion had not been updated, with some securities having been valued as far back as nine years ago.
The Auditor General further raised concern over the low utilisation of conventional funds intended for on-lending.
Of the Shs44.7 billion planned for disbursement during the financial year, only Shs23.42 billion had been disbursed by June 30, 2025.
COSASE adjourned the meeting to a further date next week and directed the Microfinance Support Centre officials to prepare detailed responses and provide supporting documentation before returning to the committee for further interrogation of the audit queries.