The Hustler Fund, a flagship
government initiative aimed at empowering low-income Kenyans through accessible
credit, is now grappling with a massive Sh6 billion loss—money loaned out but
never recovered.
According to the State Department for
Micro, Small and Medium Enterprises (MSMEs), the lost amount stems from loans
taken out by millions of Kenyans in late 2022, many of whom have since
defaulted and disappeared from the radar.
Appearing before the National
Assembly’s Committee on Trade, Industry and Cooperatives, MSMEs Principal
Secretary Susan Mang’eni disclosed that about 10 million Kenyans borrowed small
amounts, averaging Sh500 each, between November and December 2022, but never
repaid.
“Roughly Sh6 billion is at risk. We
are tracing defaulters, and if we are unable to recover the funds, a write-off
may be necessary,” Mang’eni told lawmakers.
The losses, she explained, are not yet formally written off, but they remain a concern as tracing efforts stall.
The total value of loans disbursed through the Hustler Fund stands at Sh65.7
billion, with repayments so far amounting to Sh53.2 billion.
Mang’eni acknowledged that while
nine million borrowers have been consistent with repayments and even qualified
for higher credit limits, a large group treated the fund as a giveaway.
The misuse, some officials say, may stem from the timing and messaging of the fund’s launch, coming shortly after the 2022 general elections.
On May 14, 2025, Cooperatives Cabinet Secretary
Wycliffe Oparanya, some Kenyans perceived it as a political handout rather than
a revolving loan.
“Unfortunately, post-election timing
led many to assume it was a reward. That mindset has significantly contributed
to the high default rate,” said Oparanya.
To address the situation, Oparanya
said the government is developing a system to track defaulters and enhance
recovery mechanisms.
Meanwhile, PS Mang’eni is pushing
for an additional Sh5 billion allocation to the fund in the next financial year
to support credit-worthy borrowers and accommodate new applicants.
“For those who are repaying well, we
need to increase their limits. When you raise someone’s limit from Sh500 to
Sh10,000, more capital is needed,” she explained.
However, MPs expressed concern over
the fund’s sustainability. Committee Chairperson Bernard Shinali challenged the
ministry to explain how a revolving fund worth Sh65.7 billion could fail to
recover Sh6 billion.
The fate of the unrecovered billions remains uncertain as the government balances recovery efforts, potential write-offs, and future funding needs. What started as a promise of financial empowerment is now a cautionary tale in public finance management.
