Although KCCA had already released sh1b to accounts of 140 registered groups, the government halted the process.
Peter Kauju, KCCA spokesperson, says the government cited accountability issues.
“We were told that only the Ministry of Finance was competent enough to handle such huge amounts of money, so we mandated it to Centenary Bank,” he said.
By that time, KCCA had screened and identified 400 groups who qualified, Kauju said.
He says the youth will be charged interest because the money is now channeled through the bank.
The disbursement of the funds took a new twist after the Government revised the criteria of distributing them to successful groups.
In a letter dated June 19, addressed to Kampala Capital City Authority (KCCA), the Minister in-charge of Presidency and Kampala, Muruli Mukasa, said commercial banks would take over distribution of the funds and not the authority as earlier agreed.
He said effective June 18, KCCA would manage the funds under their stewardship through commercial banks, which have the capacity to manage them.
The move came days after KCCA had released sh1b to the accounts of 140 successful registered groups. According to Kauju some groups had withdrawn money from their accounts.
Efforts to reach the managing director of Centenary Bank were futile, as his phone was off.
However, one of the youth leaders who missed the money told Saturday Vision that bank authorities told them that the money was not there yet.
Early this week, the council unanimously proposed that the funds be channeled through microfinance institutions.
The councillors want Centenary Bank to relinquish the funds so that it is channeled through microfinance institutions.
They argued that banks do not offer technical financial support, which is needed because they do not have the experience to handle such huge amounts of money.
“Microfinance institutions make good follow up and monitor the progress of their clients and how they are using the money,” said Suleiman Kidandala, the deputy mayor.
They also want the government to reinstate the previous clause that money would be given to the youth without interest.
Source The New Vision