The National Treasury has thrown a lifeline to pedestrian public servants, slashing interest rates and raising limits in a revamped car loan scheme designed to get the government moving.

It is now cheaper to drive a government-subsidized vehicle than it is to take a matatu. In a decisive move to boost morale and retention within the public sector, the National Treasury has overhauled the Civil Servants Car Loan Scheme, offering terms that commercial banks can only dream of. With interest rates dropped to a rock-bottom 3 percent (for some grades) to 4 percent, the state is effectively handing the keys to its workforce.

The new guidelines are a game-changer. A lowly civil servant in Job Group A can now access up to KSh 600,000, while the high-flying Cabinet Secretaries can borrow a staggering KSh 10 million. This tiered approach democratizes car ownership, moving it from a luxury for the elite to an accessible necessity for the rank and file. It is a calculated sweetener from a government keen to keep its workforce happy amidst rising costs of living.

The Fine Print of the Deal

Treasury Cabinet Secretary John Mbadi’s proposals also tackle the thorny issue of exit. Previously, leaving the service meant the loan interest spiked to commercial rates—a punitive measure that trapped unhappy workers. The new rules propose deleting this clause, allowing even sacked officers to keep the low rates. This is a radical shift in policy, acknowledging that financial ruin should not be a penalty for job loss.

However, the scheme is not without its hurdles. The "logbook joint registration" requirement ensures the government keeps a tight leash on the asset. You drive it, but until that last shilling is paid, the state owns it. Furthermore, the 5-year repayment period remains a tight squeeze for lower-cadre employees, whose payslips are already battered by statutory deductions.

• The Utilization Crisis: Despite the attractive terms, billions have been lying idle in the fund. The Treasury admits that uptake has been "dismal," with many officers shunning the loans due to fear of debt or lack of awareness. This revamp is effectively a marketing campaign to get that money out of the vault and onto the road.
• The Inequality Gap: While the KSh 10 million cap for top officials allows them to buy luxury SUVs, the KSh 600,000 limit for junior staff barely covers a decent second-hand hatchback in the current market. The scheme mirrors the hierarchy of the service itself—Mercedes for the bosses, Demios for the workers.

A Double-Edged Sword

For the average civil servant, this is the best chance to escape the chaos of public transport. But it comes with the golden handcuffs of debt. By tying car ownership directly to employment, the state is deepening the dependency of its workers.

Ultimately, this is a stimulus package for the auto industry disguised as an HR policy. As applications open, the parking lots of government ministries are set to fill up. The question remains: with salaries stagnant, can the civil service afford to fuel the cars they can now afford to buy?