A parliamentary committee has moved to push for a wide forensic audit into the operations of the Agricultural Finance Corporation (AFC) after lawmakers raised concern over what they described as deep-rooted financial and governance failures flagged in audit findings covering more than a decade.
The National Assembly Public Investments Committee on Social Services, Administration, and Agriculture, chaired by Navakholo MP Emmanuel Wangwe, is set to recommend the audit to establish the extent of irregularities affecting lending, approvals, and overall management of the institution.
The decision follows a detailed review of reports by the Auditor General, which pointed to widespread breaches of fiduciary duty and long-standing malpractice spanning about 14 years. MPs said the findings raised serious questions about how loans were being approved and disbursed at the corporation.
During the session on Tuesday, the Vice-Chairperson of the committee Caleb Amisi (Saboti) said members were shocked by the scale of the irregularities and indicated that action would follow after examining the evidence presented before them. MPs questioned the management of the corporation led by Director General George Kubai over the reported failures.
“Director General, this Committee has cited a lot of malpractice in the Corporation’s operations. Every book of account with us here points out to massive malpractice around the approval of loans and disbursements. What is happening in the organization?” Amisi said.
He also emphasized the importance of the institution in supporting farmers and strengthening food security through affordable financing, noting that the committee could not ignore the governance gaps exposed in the reports.
“This is a very important organization to this country. We are going to recommend that a forensic audit be carried out on the Corporation to determine where the problem is. We require a full enquiry into these matters so we don’t have the same issues recurring year in, year out,” he stated.
In response, Kubai acknowledged that there had been cases where loans were issued based on falsified documents or overvalued collateral. He told MPs that the corporation had since introduced reforms to address the weaknesses and prevent further financial losses.
"Majority of the issues we’re addressing here are historical issues. We have since embarked on a journey of review of our processes on the way we do business as an institution since I assumed leadership in 2021,” he explained.
He further told the committee that AFC had previously undergone a forensic audit following concerns raised by its board, and that officers from the Office of the Auditor General had confirmed the exercise.
Martin Owino (Ndhiwa) reminded the management that institutional responsibility does not end with leadership changes, stressing the need to correct past failures.
“The doctrine of perpetuity demands that even if you inherit a task from an institution dogged with such high level of malpractice, you have an obligation to clean up the mess,” he held.
UDA nominated MP Jackson Kosgei questioned whether the corporation’s leadership was fully in control of its operations, citing gaps in loan due diligence.
“The management of this Corporation does not seem to be in charge of its operations. How for instance did you issue loans without due diligence on the titles provided as collateral?” he asked.
He further argued that the institution should evolve into a more structured financial entity serving farmers more effectively.
“By now, you should have mutated into a farmers’ bank probably only receiving a little support from the Exchequer,” he observed.
Wambugu Wainaina (Othaya) raised concern that some of the irregularities could have involved land officials, calling for investigations to be extended beyond the corporation.
“A keen perusal of this report shows that the malpractices seem to have been carried out with the collaboration of lands officers. We want to know if any investigations have been launched on these errant officers,” he stated.
The committee also resolved to summon the Cabinet Secretary for Agriculture and the AFC Board to explain the appointment of the Board Chairperson, which MPs said may have breached legal procedures.
Lawmakers were informed that the Chairperson was appointed in 2022 for a three-year term in violation of Section 6 (1)(a) of the State Corporations Act, served the full term without correction of the anomaly, and was later reappointed in 2025.
Concerns were raised that decisions made during the disputed tenure could face legal challenge, prompting sessional chair Emmanuel Wangwe to direct that both the Cabinet Secretary and the Board Chairperson appear before the committee to respond to the governance lapse.