The Kenyan government is developing a new system to track defaulters of the Financial Inclusion Fund, popularly known as the Hustler Fund. This move is part of efforts to recover unpaid loans and ensure the sustainability of the programme, which was launched in 2022 to provide affordable credit to Kenyans, especially youth and small business owners.
Speaking before the Senate plenary, Cooperatives Cabinet Secretary Wycliffe Oparanya revealed that the state is also conducting an impact assessment of the fund. He acknowledged the high default rate, attributing it partly to a misunderstanding among borrowers, many of whom believed the loans were political handouts following the 2022 elections.
“Unfortunately, when such programmes are introduced after elections, many people assume they are being rewarded. That has contributed to the high number of defaulters,” Oparanya said.
The CS noted that a significant portion of the fund has now been classified as bad debt, with over Sh11 billion in loans currently unpaid. Data from the State Department for Micro, Small, and Medium Enterprises indicated that the default rate had crossed the 50 percent mark by September 2024.
Oparanya emphasized that the government remains committed to recovering the funds. “I urge Kenyans who borrowed this money to repay it. This initiative is well-intentioned and meant to benefit many,” he stated, adding that the new tracking system will support recovery efforts and enhance accountability.
Since its inception, the Hustler Fund has disbursed over Sh70 billion to more than 25 million Kenyans. About two million borrowers have moved to higher loan brackets—up to Sh150,000—due to consistent repayment, demonstrating the fund’s potential when managed effectively.
In addition, Oparanya announced the launch of a Sh33 billion youth and women empowerment programme in partnership with the World Bank, with sensitisation campaigns already underway.
He reiterated that the Hustler Fund remains a transformative tool designed to provide inclusive financial access without the need for collateral or credit history, and called on defaulters to repay their loans so that more Kenyans can continue to benefit.
