Government to Track Hustler Fund Defaulters as 19 Million Borrowers Fail to Repay Loans

The Kenyan government has announced plans to track down millions of defaulters who borrowed from the Hustler Fund, a key initiative under the Kenya Kwanza administration aimed at providing accessible credit to low-income earners. This revelation was made by Cooperatives Cabinet Secretary Wycliffe Oparanya during the Kenya Private Sector Alliance (KEPSEA) annual conference on Friday.

Oparanya disclosed that out of the 21 million Kenyans who accessed loans from the Hustler Fund, a staggering 19 million have defaulted on their repayments. The fund, designed as a revolving loan facility, is reliant on borrowers repaying their loans to sustain its operations and benefit other applicants.

“This alert fund was very innovative and digital, but the problem we have had with the Hustler Fund is that in the first round, 21 million people borrowed it, but out of that, 19 million people disappeared with the money,” Oparanya stated. He emphasized that the government is now developing a digital system to track the location of defaulters.

Oparanya issued a stern warning to those who have defaulted, stating, “We are coming up with a system that will now track you to know where you are. You will soon see someone knocking on your door telling you to pay back the Hustler Fund.”

In contrast to the defaulters, the government is planning to reward those who have consistently repaid their loans. According to Oparanya, regular borrowers who have maintained good standing with their repayments have already seen their loan limits increased, with some receiving limits as high as Ksh2 million.

"As the government does its bit, you must also do the same. Make sure that when you borrow, you create a conducive environment for you to do business," Oparanya urged.

In July, the government revealed that Ksh54 billion had been disbursed through the Hustler Fund, with over 8 million repeat borrowers. Additionally, the initiative has mobilized Ksh3 billion in savings from 23.4 million Kenyans over a 20-month period.

The government's next steps in tracking defaulters will be crucial in determining the future success of the Hustler Fund and its role in supporting Kenya's informal sector. As the digital tracking system rolls out, it remains to be seen how effectively the government can recover the outstanding loans and ensure the sustainability of this ambitious program.