US Govt Orders Investigations in Kenya Over Ksh1.3 Billion Loan
The US Government has initiated inquiries into a Kenyan educational institution that obtained a loan of Ksh1.3 billion (equivalent to USD10 million) following allegations of sexual misconduct involving underage individuals.
In a letter issued on March 19, Scott Nathan, the CEO of the U.S. International Development Finance Corporation (DFC), instructed the corporation’s Office of Accountability (OOA) to carry out an impartial and thorough evaluation of DFC’s complete engagement with the institution.
In March of the previous year, the Intercept, an American media organization, published a report alleging that the loan providers, such as DFC, Overseas Private Investment Corporation (OPIC), and the International Finance Corporation, did not respond appropriately to reports of sexual abuse at the international school from 2013 to 2018.
So, Scott has instructed the accountability department to look into whether OPIC or DFC were informed about the allegations and ignored them.
“As part of this review, I am requesting that OOA assess and perform a compliance review of OPIC/DFC’s due diligence in connection with OPIC’s 2013 loan to (the school) and supervision of E&S risks related to (the school’s) operations, including whether OPIC or DFC was made aware of, or in its role as lender exercising reasonable care should have been aware of, alleged child sexual abuse at Bridge schools in Kenya in light of information that has recently been disclosed by the International Finance Corporation (IFC), a member of the World Bank Group. Please also review whether OPIC and DFC failed to take action concerning any such allegations,” He directed.
IFC, the private sector division of the World Bank, published an extensive report detailing its team’s activities concerning the project from 2013 to 2022, during which it provided financial support to the school.
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In the letter, Scott disclosed that findings from the Compliance Advisor Ombudsman (CAO) at IFC indicated that various labor, health, and safety issues emerged during the project’s monitoring process.
“Starting in 2018, IFC’s CAO initiated the first of several investigations into concerns about the operation of the schools in Kenya. The major concern of the CAO was the IFC’s failure to consider the project’s potential child sexual abuse risks and, during supervision, failure to address project-related child sexual abuse once it received information relating to that abuse,” he added.
In 2013, the group of schools received a loan of Ksh1.3 billion from lenders, which significantly accelerated the institution’s swift growth, particularly in slum areas and low-income communities.
The revelation by The Intercept suggested that the IFC staff neglected their responsibility to conduct a proper investigation when the allegations surfaced. The accusations of sexual assault reportedly implicated teachers within the establishments.
Following the raised concerns, U.S. Senator Elizabeth Warren and her counterpart penned a letter to the U.S. Treasury Secretary, urging for impartial investigations to be conducted.
A statement from the Treasury showed that the department was “concerned and alarmed at the prospect that children may have been sexually abused in the context of an IFC project.”
Not long after, during a press conference, Ajay Banga, the President of the World Bank, stated his belief that the organization was not directly involved in perpetuating the concealment.
“I think there’s a series of things management could have done better. And that’s the discussion we’re going to have with the board shortly,” he told the press.
US Govt Orders Investigations in Kenya Over Ksh1.3 Billion Loan