NAIROBI, Kenya – The government is preparing to crack down on M-Pesa accounts and airtime balances of Kenyans who have defaulted on repaying loans from the Hustler Fund, a move aimed at recovering approximately Sh7 billion in unpaid debts.
Elizabeth Nkukuu, the acting CEO of the Financial Inclusion Fund (commonly known as the Hustler Fund), told MPs that recovery efforts have hit a dead end, with 13 million defaulters still owing billions.
Speaking before the National Assembly’s Special Funds Account Committee, Nkukuu revealed that most defaulters took out loans in the first two months after the fund’s launch in November 2022.
“We are mostly dealing with people who borrowed early on, and the default amount has now reached Sh7 billion,” Nkukuu explained.
She added that the Fund is considering legal provisions to allow deductions from defaulters’ mobile money accounts and airtime purchases to ensure the fund remains solvent.
Nkukuu emphasized that many of the defaulters are financially capable of repaying, citing their mobile money transaction histories.
“These are people of means, but they simply refuse to repay. They transact an average of Sh21,000 per month,” she said.
Despite constant reminders sent during M-Pesa transactions, many have ignored the notifications.
Lawmakers on the committee, chaired by Migori Woman Representative Fatuma Mohammed, expressed concerns over the fund’s sustainability, especially given that the loans are not insured.
MPs Majimbo Kalasinga (Kabuchai) and Rahim Dawood (North Imenti) questioned the lack of insurance coverage for the billions dispensed.
“How can we give out billions that are not insured? This could lead to massive losses of taxpayers’ money,” Kalasinga noted, while Dawood added, “This fund is not working.”
Nkukuu confirmed that the disbursed loans are not insured, which is why the government is now resorting to more aggressive recovery methods.
The committee directed Nkukuu and her team to provide detailed information on the 13 million defaulters within two weeks.
They were also tasked with addressing the issues raised in the 2022/23 audit by Auditor General Nancy Gathungu, which revealed that loans had been issued to over 1,300 people who were not registered with the Fund.
Additionally, instances of duplicate loan identity numbers were uncovered, with some being used to secure more than one loan.
Launched by President William Ruto in late 2022 with a seed capital of Sh12 billion, the Hustler Fund was designed to provide affordable credit to low-income Kenyans.
However, the Fund has faced multiple challenges, from widespread defaulting to questions over its management and oversight.
Elizabeth Nkukuu, the acting CEO of the Financial Inclusion Fund (commonly known as the Hustler Fund), told MPs that recovery efforts have hit a dead end, with 13 million defaulters still owing billions.
Speaking before the National Assembly’s Special Funds Account Committee, Nkukuu revealed that most defaulters took out loans in the first two months after the fund’s launch in November 2022.
“We are mostly dealing with people who borrowed early on, and the default amount has now reached Sh7 billion,” Nkukuu explained.
She added that the Fund is considering legal provisions to allow deductions from defaulters’ mobile money accounts and airtime purchases to ensure the fund remains solvent.
Nkukuu emphasized that many of the defaulters are financially capable of repaying, citing their mobile money transaction histories.
“These are people of means, but they simply refuse to repay. They transact an average of Sh21,000 per month,” she said.
Despite constant reminders sent during M-Pesa transactions, many have ignored the notifications.
Lawmakers on the committee, chaired by Migori Woman Representative Fatuma Mohammed, expressed concerns over the fund’s sustainability, especially given that the loans are not insured.
MPs Majimbo Kalasinga (Kabuchai) and Rahim Dawood (North Imenti) questioned the lack of insurance coverage for the billions dispensed.
“How can we give out billions that are not insured? This could lead to massive losses of taxpayers’ money,” Kalasinga noted, while Dawood added, “This fund is not working.”
Nkukuu confirmed that the disbursed loans are not insured, which is why the government is now resorting to more aggressive recovery methods.
The committee directed Nkukuu and her team to provide detailed information on the 13 million defaulters within two weeks.
They were also tasked with addressing the issues raised in the 2022/23 audit by Auditor General Nancy Gathungu, which revealed that loans had been issued to over 1,300 people who were not registered with the Fund.
Additionally, instances of duplicate loan identity numbers were uncovered, with some being used to secure more than one loan.
Launched by President William Ruto in late 2022 with a seed capital of Sh12 billion, the Hustler Fund was designed to provide affordable credit to low-income Kenyans.
However, the Fund has faced multiple challenges, from widespread defaulting to questions over its management and oversight.
