The Development Finance Institute of Canada, FinDev has been faulted for investing over Ksh6.8 billion (USD 42.4 million) in a Kenyan loan company.
According to reports, FinDev invested the funds into the loan company without a return on investment.
As a government-funded institution, FinDev was part of Canada's plan to boost investment in developing countries like Kenya.
The Canadian government began investing in the country in 2017 and continued to fund its operation over the years. However, the investment was reported to have failed to generate expected revenue.
Reports indicated that FinDev also bought shares worth Ksh2.5 billion (USD15.4 million) at the Kenyan company in 2020.
However, after the purchase, the company's trajectory took an unexpected turn, losing more than Ksh4.0 billion (USD25 million) in the wake of the pandemic.
Reports alleged that the Canadian government failed to explain why the shares were purchased with taxpayers' money and why more funds were channelled to the tech and loan company despite generating losses.
Despite the losses and failure to break even, FinDev was said to have invested Ksh4.4 (USD27 million) in the company in August last year.
Angela Rodriguez, the Head of Marketing at FinDev, explained that the decision to buy shares was informed by the financial return consideration.
She also revealed a plan to exit the investment in 2024.
"FinDev noted simply that there might be a potential exit of investment in 2024," she stated, as reported by Rebel News.
Additionally, the company explained that the investment was part of a program to promote gender equality in poor countries. The phone company is said to have a women employment rate of 50 per cent.
"FinDev Canada has not deliberately or inadvertently misled Parliament," Rodriguez stated.
