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. This was revealed in a statement by the Principal Secretary (PS) for Micro, Small, and Medium Enterprises Development, Susan Mang’eni.
Millions Default, Billions at Risk
Appearing before the National Assembly Committee on Trade, Industry, and Cooperatives on May 21, PS Mang’eni disclosed that a significant number of borrowers had failed to repay their loans for over two years, putting the fund in jeopardy.
“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 looming loss, the PS said the ministry is crafting strategies to recover the loans. These include introducing a system of incentives and penalties for defaulters. However, Mang’eni admitted that the current legal framework makes it difficult to enforce strict recovery actions.
“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.
“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 inception.
PS Mang’eni noted that around 9 million borrowers are still actively repaying their loans.
She further urged Parliament to allocate an additional Ksh5 billion for the 2025/2026 financial year to support compliant borrowers and raise limits for responsible ones.
Calls for Accountability
With the Hustler Fund facing growing scrutiny, experts are calling on the government to enhance transparency and oversight to prevent misuse in future disbursements.
The fund remains a key pillar of President Ruto’s Bottom-Up Economic Transformation Agenda, aimed at empowering ordinary Kenyans through affordable credit.
