Government to raid M-Pesa, airtime accounts of Hustler Fund defaulters to recover Sh7bn

The Government plans to recover Sh7 billion from 13 million defaulters of the Hustler Fund by raiding their M-Pesa accounts and airtime balances.

Acting Chief Executive Officer of the Hustler Fund, Elizabeth Nkukuu, revealed this during a session with the National Assembly's Special Funds Committee, saying that discussions are currently ongoing with Safaricom on how to execute the recovery process.

Appearing before the committee on Tuesday, Nkukuu explained that the defaulters were largely borrowers who took loans during the first two months after the launch of the Hustler Fund.

“This is a conversation that is still ongoing with the mobile operator,” she said.

Nkukuu informed the committee, chaired by Migori Women Representative Fatuma Mohammed, that the government has identified all defaulters and will employ all legal avenues to reclaim the amounts owed.

According to her, the details of the defaulters are available, and there is a solid plan in place to address the issue.

Since its launch in November 2022, the Hustler Fund has disbursed Sh57.8 billion to 24 million Kenyans.

Two million borrowers currently maintain good financial credit, while five per cent of every loan borrowed is retained as savings for the borrowers. The savings have accumulated to Sh3.5 billion.

Nkukuu also noted that the eight per cent interest rate charged on the loans is distributed among mobile operators, banks, the secretariat, and the Fund's growth initiatives.

Further, Nkukuu said many defaulters have the financial capacity to repay their loans, based on their regular M-Pesa transactions.

“It’s not that they cannot pay. They are people who just don’t want to pay,” she told the committee.

The government plans to use a “nagging” technique, which includes regularly calling defaulters to remind them to settle their loans. Failing that, legal measures will be taken to extract the money from their M-Pesa wallets and airtime.

“We have checked the numbers, and it shows that 98 per cent of the defaulters are still active. That gives us hope that we can recover the money. For those who have borrowed and have since passed away, there’s nothing we can do, but they account for only two to three per cent,” Nkukuu said.

Principal Secretary for Micro, Small, and Medium Enterprises, Susan Mang'eni, echoed Nkukuu’s sentiments, affirming that defaulters have been given ample time to repay their loans.

“We are going to segment them and then institute a forceful recovery. We know them... we have their mobile numbers, unique identifiers, and ID numbers,” Mang'eni said.

“If we had started chasing them in the first month, they would have said it’s too soon, but we have given them two years. That is enough time,” she added.

The Hustler Fund was launched as a key promise by President William Ruto during his campaign for the August 2022 General Election, aimed at providing affordable credit to individuals who were previously locked out of mainstream financial systems.