Government Considers Writing Off Ksh6 Billion Lost in Hustler Fund Loans
By The Star Reporter | Kenya News Today – The Star
The government may write off nearly Ksh6 billion in defaulted Hustler Fund loans borrowed by over 10 million Kenyans since the initiative launched in 2022, according to a statement by Micro, Small, and Medium Enterprises Development Principal Secretary Susan Mang’eni.
Millions Default, Billions at Risk
While appearing before the National Assembly Committee on Trade, Industry, and Cooperatives on May 21, PS Mang’eni revealed that a significant portion of borrowers had failed to repay their loans for over two years, placing the fund in jeopardy.
“They never repaid, and that’s what we will be seeking to write off. The portfolio that is totally at risk and is in default is between Ksh5 billion and Ksh6 billion,” said Mang’eni.
Plans for Recovery Underway
Despite the staggering loss, Mang’eni noted that the ministry is exploring strategies for loan recovery, including a system of incentives and penalties for defaulters. However, she admitted that the existing legal framework limits aggressive recovery efforts.
“Since we had graded these people, we are going to institute a mechanism of recovery through incentives and certain sanctions, like locking them from accessing other enhanced opportunities,” she stated.
She added, “If we were to do forceful recovery again, the challenge will be the law, so we are looking at the law to see at what point we will introduce forceful recovery.”
Fund Still Active Despite Losses
The Hustler Fund, launched under President William Ruto’s administration to boost entrepreneurship among low-income Kenyans, has disbursed over Ksh65.7 billion since inception. According to PS Mang’eni, around 9 million borrowers are still actively repaying their loans.
To support those who are compliant and to enhance limits for responsible borrowers, Mang’eni has appealed to Parliament to allocate an additional Ksh5 billion in the 2025/2026 financial year.
Calls for Accountability
As the Hustler Fund faces scrutiny, experts have urged the government to increase transparency and oversight to ensure future disbursements are protected from misuse. The fund’s success is seen as a vital pillar of President Ruto’s bottom-up economic agenda.
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