If you are one of those who benefited from the government loan dubbed “Hustler Fund”, and have not paid it back, stay on the lookout.
Defaulters of the loan facility could soon have their M-Pesa accounts raided and airtime deducted in a bid to recover the funds.
Currently, the loan facility has a default rate of about 78 percent.
Recovery Amid A Financial Crisis
Financial Inclusion Fund acting CEO, Elizabeth Nkukuu, appearing before the National Assembly’s Special Funds committee, told MPs that they are exploring several options to recover the funds which run to the tune of billions.
Nkukuu said it disbursed over Sh13 billion. Nkukuu said Sh7 billion is still owed by 13 million Kenyans who have defaulted.
Since the government is cash-strapped as a result, the acting CEO argued, they are considering alternatives to counterdefaulters.
The move, she said, could be enforced in the coming months.
Legislators Questioned The Move
At the committee, MPs expressed concerns over the reported default figures and asked for a critical analysis of the evidence.
Others questioned the rationale of raiding the M-Pesa accounts of the defaulters and the ways through which they intend to recover the defaulted funds.
The committee adjourned the meeting after learning that the Fund was yet to present the required documentation to the office of the Auditor-General.
It was found out, from Nkukuu, that the money was not insured. This prompted further deliberation on the need for a risk assessment to safeguard taxpayer funds.
Fatuma Zainab, the committee’s chairperson and also Migori County woman representative, asked the Fund’s management to submit detailed reports to the committee within two weeks.
The Hustler Fund
Hustler Fund is a Kenyan government project that provides instant loans to Kenyan citizens upon request.
It was launched by President Ruto in late 2022 to provide at least $420 million in loans.
The facility was a campaign promise made by Ruto during Kenya’s 2022 presidential election.
It was started to alleviate the majority of Kenyan citizens who are in a state of perpetual debt as a result of expensive digital loans. Digital loans often carry high interest rates, making it impossible for average citizens to pay them off.
Second Phase of Hustler Fund
The government is working on a “second phase” of the program that would increase the total amount of funding available, targeting areas of the economy with higher potential for growth.
On June 1 (Madaraka Day), Ruto announced the launch of the “Hustler Group Loan,”. This is a secondary product that would distribute loans between Kshs20,000 and 1,000,000.
The group loan is only available to conglomerates of at least ten people.
To counter defaulters, Ruto announced that the larger Hustler Group Loan would be inaccessible to defaulters.
