The government is developing a system to track Kenyans who have defaulted on loans from the Financial Inclusion Fund, commonly known as the Hustler Fund.
At the same time, the state is conducting an impact assessment of the fund, which was rolled out in 2022.
This came as the government announced the launch of a Sh33 billion youth and women empowerment initiative in collaboration with the World Bank.
Cooperatives CS Wycliffe Oparanya shared the updates when he appeared before the Senate plenary yesterday to respond to lawmakers' questions.
“This is a very important initiative. It’s a joint venture between the Government of Kenya and the World Bank involving Sh33 billion. Already, sensitisation programmes are underway,” he said.
Oparanya also reiterated the government’s commitment to recovering unpaid Hustler Fund loans, noting that the rising number of defaulters has resulted in a significant portion of the fund being declared as bad debt.
“I urge Kenyans who borrowed this money to repay it. This initiative is well-intentioned and meant to benefit many,” he said.
The CS said the fund, launched shortly after the 2022 elections, was misunderstood by some borrowers as a government giveaway.
“Unfortunately, when such programmes are introduced after elections, many people assume they are being rewarded. That has contributed to the high number of defaulters,” he said.
Oparanya assured the public the new tracking system will help recover the funds and ensure more Kenyans benefit.
Data released in September last year by the State Department for Micro, Small, and Medium Enterprises (MSMEs) showed the default rate had surpassed 50 per cent.
The report indicated more than half of borrowers had failed to repay loans totalling Sh11 billion.
Appearing before the National Assembly’s Special Funds Account Committee in October, Hustler Fund acting CEO Elizabeth Nkuku said many early borrowers had not repaid their loans, despite several reminders.
“They are mostly people who borrowed during the first and second months. The default amount stands at about Sh7 billion,” she told the committee.
Since its inception, the Hustler Fund has disbursed more than Sh70 billion to more than 25 million Kenyans.
Oparanya said about two million beneficiaries have “graduated” to higher loan limits due to consistent repayment.
“These borrowers have earned higher limits—up to Sh150,000. The fund is working well and supporting many Kenyans, despite initial challenges,” he said.
The Hustler Fund is a state-run digital lending platform aimed at providing affordable credit and shielding Kenyans from exploitative online lenders.
“The Hustler Fund credit model is inclusive. It does not require collateral or a credit history,” Oparanya noted, describing the fund as a transformative initiative.
He urged defaulters to repay their loans to ensure the programme remains sustainable and continues to reach more Kenyans.
