Health Secretary Humza Yousaf has told a jury he loaned Natalie McGarry money to stop her being evicted from her home.
The MSP stated that a "distressed" McGarry came to his office in Glasgow city centre in February 2014.
He claimed that was told by McGarry that she did "not have the money" and was threatened with losing her property that day.
Yousaf said he then gave McGarry £600 which was later paid back.
The ex- SNP MP for Glasgow East allegedly embezzled £21,000 while she was treasurer for Women for Independence (WFI) between 26 April 2013 and 30 November 2015.
A second charge states McGarry took £4,661 between 9 April 2014 and 10 August 2015 while treasurer, secretary and convenor of the Glasgow Regional Association.
Yousaf told jurors in evidence at Glasgow Sheriff Court that McGarry arrived at his West Nile Street constituency office.
Yousaf: "I think she was speaking to my office manager at the time Shona McAlpine.
"She came to my office in a state of distress.
"I asked her what was wrong and she told me she was threatened with being evicted that day if she didn’t come up with around the sum of £600 and she didn’t have the money at that point.
"There was a reason I can’t remember in much detail.
"There was a reason her and her partner didn’t have access to the funds.
"I offered to give her a loan of funds about the £600 mark from the bank across the road.
"I made the transaction and the money was returned roughly in the timescale."
Prosecutor Alistair Mitchell asked: "Was there a discussion on the source of the funds being used to pay the money back?"
Yousaf said: "No."
Mitchell showed a bank statement which stated that money was paid back to Yousaf in April 2014.
Allan Macleod, defending, put it to Yousaf that McGarry had not gone directly to the witness and asked for cash.
The lawyer suggested that Yousaf had overheard a telephone call between McGarry and McAlpine then a later conversation between the two in person at his office.
Yousaf agreed and stated that he then had a conversation wMcGarry where he discussed loaning the money.
He was also asked by Macleod if it was fair to say that McGarry was "disorganised" and "overdramatic."
Yousaf replied: "Yes."
McGarry's friend Jonathan Mackie, 42, stated that he was repeatedly sent money by McGarry who "misplaced" her bank card.
He stated that he was then tasked with taking money out of the bank to give to her.
The witness initially believed this happened on "five or six" occasions but he told the jury that he was informed by the police that this took place 13 times.
Mackie claimed that he visited McGarry and her partner after WFI released a statement regarding the ongoing issues between them.
He stated that he offered McGarry and her partner to stay at his nearby property for two nights.
Mitchell asked what McGarry's demeanour was like that night.
He replied: "She was quite rational at the start trying to work out a strategy of how to fight it.
"Over the course of the night she was being emotional and was in complete bits crying a lot.
"As that evening went on, she was saying 'let's fight this'."
He later said: "I cleared the spare bedroom and obviously put kitchen knives away as I was concerned for her welfare."
The witness claimed that he then found out McGarry had taken out a loan with Amigo Loans.
He said: "This was past her being elected after May 2015 - that's what was surprising.
"I knew how much she earned after tax and the idea would be if you need a payday loan to get you through to pay day as the name suggests - it was just crackers."
Macleod put it to Mackie that the loan was not a "payday loan" but £5,000 she took out from Amigo over a five-year period in December 2013.
McGarry - of Clarkston, East Renfrewshire - denies the two charges.
The trial continues before sheriff Tom Hughes.
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