The Kenyan government has announced plans to write off a total of Ksh 6 billion in defaulted loans from the Hustler Fund, a flagship initiative aimed at providing affordable credit to small-scale businesses. This move comes as approximately 10 million Kenyans who took loans in 2022 have failed to repay them.
Principal Secratery for Micro Small and Medium Enterprises (MSMEs) Development Susan Auma Mang’eni, while appearing befor the National Assembly’s committee on Committee on Trade, Industry, and Cooperatives, Micro, Small, and Medium Enterprises Development on Wednesday, May 21, 2025 disclosed that the defaulters borrowed the money once or twice in November and the end of December and disappeared since then. However, PS Mang’eni stated that they have not yet reached the write-off stage since they are currently pursuing defaulters.
“We are tracing them, and if we cannot recover the money, we will be considering a write-off of about Sh6 billion for individuals who borrowed and vanished. But we are not at the write-off stage at this moment because we are pursuing a defaulter,” Mang’eni said.
Despite the substantial defaults, PS Mang’eni has defended Hustler Fund’s performance, noting that 9 million of the 24.8 million Kenyans enrolled in the Fund are faithful borrowers, repaying their loans on the due date.
In addition to the write-off, the government is also seeking an additional allocation to the Hustler Fund amounting to KES 5 billion. The additional funding is intended to sustain the Fund’s operations.
However, the proposal faced pushback from legislators, with Members of Parliament (MPs) questioning the Fund’s sustainability and the prudence of allocating more taxpayer money to a program with such high default rates.
“Why should we allocate you additional Sh5 billion from taxpayers when people have run away with billions of shillings from the Hustler Fund?” the Maryanne Keitany committee’s vice chairperson asked.
Some MPS argued that it is unwise to allocate more funds to the program that has already experienced such significant losses. Machakos Woman Representative Joyce Kemene and Kajiado South MP Samule Parashina echoed these concerns, calling on the ministry to rethink how it finances its initiatives.
The government is reportedly contemplating legal changes to facilitate more forceful recovery of unpaid loans in the future. The Hustler Fund, launched by President William Ruto, was designed to democratize access to credit for low-income earners and was a key promise during his 2022 presidential campaign.
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