The government may write off nearly Ksh6 billion in defaulted Hustler Fund loans borrowed by more than 10 million Kenyans since the initiative was launched in 2022, according to a statement by Micro, Small, and Medium Enterprises Development Principal Secretary (PS) Susan Mang’eni.
Millions Default, Billions at Risk
While appearing before the National Assembly Committee on Trade, Industry, and Cooperatives on May 21, PS Mang’eni revealed that a significant number of borrowers had failed to repay their loans for over two years, putting the fund at risk.
“They never repaid, and that’s what we will be seeking to write off. The portfolio that is totally at risk and in default is between Ksh5 billion and Ksh6 billion,” she said.
Plans for Recovery Underway
Despite the potential loss, Mang’eni noted that the ministry is developing strategies to recover the loans, including implementing a system of incentives and penalties for defaulters. However, she acknowledged that the current legal framework poses a challenge to enforcing strict recovery measures.
“Since we had graded these people, we are going to institute a mechanism of recovery through incentives and certain sanctions, like locking them out of accessing other enhanced opportunities,” she explained.
She added, “If we were to do forceful recovery again, the challenge would be the law. So we are reviewing the legal framework to determine at what point we can introduce forceful recovery.”
Fund Still Active Despite Losses
The Hustler Fund, launched under President William Ruto’s administration to promote entrepreneurship among low-income Kenyans, has disbursed over Ksh65.7 billion since its inception. According to PS Mang’eni, approximately 9 million borrowers are still actively repaying their loans.
To support compliant borrowers and raise limits for responsible ones, Mang’eni has appealed to Parliament to allocate an additional Ksh5 billion for the 2025/2026 financial year.
Calls for Accountability
As the Hustler Fund comes under increased scrutiny, experts have urged the government to enhance transparency and oversight to prevent misuse of future disbursements. The fund is considered a key pillar of President Ruto’s bottom-up economic transformation agenda.
