The government is preparing to write off about Ksh.6 billion in unpaid Hustler Fund loans, borrowed by roughly 10 million Kenyans since 2022. This was revealed by Susan Mang’eni, Principal Secretary for Micro, Small and Medium Enterprises Development, during her appearance before the National Assembly’s Committee on Trade, Industry, and Cooperatives.
Mang’eni explained that despite the two-year window for repayment, many borrowers have failed to meet their obligations. “The total at-risk and defaulted portfolio is between Ksh.5 billion and Ksh.6 billion,” she said.
To support the fund’s sustainability, the PS urged lawmakers to approve an additional Ksh.5 billion for the upcoming financial year. She stated that of the Ksh.65.7 billion disbursed so far, about Ksh.53.2 billion has been repaid, and around 9 million Kenyans continue to borrow and repay regularly.
Mang’eni emphasized the need for further funding to accommodate successful borrowers who are ready to graduate to higher loan limits, as well as to cater to new applicants. “We need to boost limits for those performing well. If someone moves from borrowing Ksh.500 to Ksh.10,000, we need more funding to support that,” she said.
However, the fund’s default rate has drawn criticism from lawmakers. Starehe MP Amos Mwago questioned the viability of continuing with the program under such losses, warning that it could worsen the government’s debt burden. “We can’t afford to keep writing off Ksh.6 billion,” he said.
In response, Mang’eni said the ministry is considering legal reforms to enable stricter recovery measures for unpaid loans. The Hustler Fund, launched as a key initiative of President William Ruto’s campaign to support small businesses, has attracted over 25 million applicants, but nearly half have defaulted on their loans.
Despite the setbacks, officials maintain the fund remains a vital tool in supporting micro-entrepreneurs across the country.
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