Auditor General Uncovers Shs10bn Fraud in PDM Loan Disbursements

Summary:

• A report by the Auditor General has uncovered fraud in Uganda’s Parish Development Model (PDM), revealing Shs10bn in loans was disbursed multiple times to the same individuals, including cases of duplicate identities. Poor oversight and unregistered beneficiaries undermine the program’s goals of promoting financial inclusion.

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A recent audit report has exposed major flaws in the disbursement of loans under Uganda’s Parish Development Model (PDM), raising questions about the program’s integrity and its effectiveness in promoting financial inclusion.

The Auditor General revealed numerous irregularities, including multiple approvals and disbursements to the same individuals or households. For instance, Shs896 million in loans was issued to 902 beneficiaries, with many receiving multiple loans under questionable circumstances.

Key findings included:

• 50 individuals with identical National Identification Numbers (NINs), names, and phone numbers receiving loans totaling Shs49.8 million.
• 800 individuals with matching NINs and names but different phone numbers securing loans worth Shs795.2 million.
• 52 individuals with duplicate NINs but varying names and phone numbers obtaining loans amounting to Shs50.72 million.
• 10,646 individuals approved multiple times for loans totaling Shs10.432 billion, disbursed to 5,710 households.

The report also highlighted that Shs826 million was granted to 832 beneficiaries from unregistered enterprise groups, making recovery in case of defaults nearly impossible.

Additionally, Shs8.611 billion was disbursed to 13,844 beneficiaries, with most receiving less than Shs1 million, contrary to the program’s User Handbook, which caps loans at Shs1 million per household under the financial inclusion pillar.

Launched by President Museveni in February 2022, the PDM aimed to uplift subsistence households by transitioning them into the money economy, improving food security, and increasing incomes. However, these findings indicate significant gaps in oversight and accountability, undermining the program’s objectives and its potential to bring meaningful change to grassroots communities.