The government has announced plans to write off up to Sh 6 billion in defaulted Hustler Fund loans and is now pushing MPs to approve legal frameworks that will allow it to recover unpaid loans more aggressively.
Principal Secretary for Micro, Small and Medium Enterprises (MSME) Development, Susan Mang’eni, told parliament on Wednesday, May 21, that about 10 million Kenyans who borrowed from the Hustler Fund in 2022 have failed to repay their loans.
Piped gas and WiFi: Inside Mukuru houses handed over by Ruto
The total defaulted portfolio stands at between Sh 5 billion and Sh 6 billion.
Speaking before the National Assembly Committee on Trade, Industry, and Cooperatives, Mang’eni defended the fund’s performance, saying 9 million borrowers remain active and continue to pay back their loans.
She called on MPs to approve an additional Sh 5 billion allocation to support growing demand.
“The borrowers took about Sh 6 billion in loans. They never repaid. That’s what we’ll be seeking to write off. We are now looking at the law to see at what point we can introduce forceful recovery,” Mang’eni said. “
Mang’eni revealed that the ministry is exploring a dual strategy of incentives and sanctions to improve repayment. Among the proposed measures is blocking defaulters from accessing government-backed financial opportunities in future.
“The challenge we face with recovery is legal. Any attempt to enforce repayment would require changes in the current legal framework,” she added.
So far, the government has disbursed Sh 65.7 billion through the Hustler Fund, with Sh 53.2 billion already repaid. According to Mang’eni, the additional Sh 5 billion would support 4.5 million borrowers transitioning into higher loan brackets, as well as new applicants enrolling daily.
President Ruto hands over 1080 new homes in Mukuru amid pomp and colour!
Currently, borrowers can access the Hustler Fund by dialing *254#, with limits starting at Sh 100 and increasing gradually based on repayment discipline.
President William Ruto, who launched the Hustler Fund as a flagship promise in the 2022 campaign, had earlier described it as a revolutionary tool to empower small businesses and promote financial inclusion.
He also hinted that repayment records from the Fund could help some Kenyans improve their credit scores and eventually regain access to formal financial services.
