State developing system to track Hustler Fund defaulters
Cooperatives Cabinet Secretary Wycliffe Oparanya told the Senate plenary that the system will help recover unpaid loans and ensure the fund benefits more people.
The government is developing a system to track Kenyans who have defaulted on loans from the Hustler Fund, officially known as the Financial Inclusion Fund.
The move comes amid concerns over rising defaults, with more than half of the loans already disbursed falling into bad debt.
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Cooperatives Cabinet Secretary Wycliffe Oparanya told the Senate plenary that the system will help recover unpaid loans and ensure the fund benefits more people.
He also revealed that the government is conducting an impact assessment of the fund, which was launched in 2022.
“This is a very important initiative. It’s a joint venture between the Government of Kenya and the World Bank involving Sh33 billion. Already, sensitisation programmes are underway,” Oparanya said.
He urged borrowers to repay their loans, pointing out that many misunderstood the fund as a handout from the government.
“I urge Kenyans who borrowed this money to repay it. This initiative is well-intentioned and meant to benefit many,” the CS said.
Oparanya noted that the Hustler Fund, launched shortly after the 2022 elections, was wrongly interpreted by some as a reward, leading to high default rates.
“Unfortunately, when such programmes are introduced after elections, many people assume they are being rewarded. That has contributed to the high number of defaulters,” he said.
The CS added that the tracking system under development will support recovery efforts and help maintain the fund’s sustainability.
Data from the State Department for Micro, Small, and Medium Enterprises, released in September last year, showed a default rate of over 50 per cent. Borrowers had failed to repay loans amounting to Sh11 billion.
In October, Hustler Fund acting CEO Elizabeth Nkuku told the National Assembly’s Special Funds Account Committee that many early borrowers had ignored repayment reminders.
“They are mostly people who borrowed during the first and second months. The default amount stands at about Sh7 billion,” she said.
Despite the challenges, Oparanya highlighted the fund’s positive impact. He said more than Sh70 billion has been disbursed to over 25 million Kenyans. About two million borrowers who consistently repaid their loans have moved up to higher limits.
“These borrowers have earned higher limits, up to Sh150,000. The fund is working well and supporting many Kenyans, despite initial challenges,” he said.
He described the Hustler Fund as a digital platform that offers affordable credit without the need for collateral or credit history.
“The Hustler Fund credit model is inclusive. It does not require collateral or a credit history,” Oparanya said, calling it a transformative initiative.
He called on defaulters to settle their debts so the fund can continue helping more Kenyans.
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