NAIROBI, Kenya – The government has unveiled tough new measures targeting Hustler Fund defaulters, warning that millions of Kenyans who have failed to repay their loans will be locked out of other state-backed credit schemes, including the Social Health Authority’s (SHA) Lipa Pole Pole initiative.
According to official figures, about nine million borrowers have defaulted since the Hustler Fund was launched three years ago, though the total defaulted amount has fallen to Sh5 billion, down from Sh6 billion.
The fund has so far enrolled 26.5 million members and disbursed about Sh70 billion.
Principal Secretary in the State Department of Micro, Small and Medium Enterprises Development, Susan Mang’eni, said borrowers who deliberately avoid repayment will be classified as offenders and face restrictions.
“If you do not pay back, then you are denying others an opportunity to use the facility. You are categorised as criminals,” Mang’eni told a forum on Thursday.
She added that the government has offered a financial amnesty to defaulters who step forward to clear their outstanding Hustler Fund loans.
At the same event, Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya announced that loan defaulters would also be barred from accessing credit from banks, SACCOs, and other financial institutions, as part of a wider strategy to instil repayment discipline.
“Before any bank approves a loan, it will confirm if the borrower has a history with the Hustler Fund and if they honoured repayment,” Oparanya said. “This is about accountability. If you took money from the Fund and failed to repay, you will not access credit.”
The Hustler Fund was launched in November 2022 to provide affordable loans to the informal sector, which Oparanya described as “the backbone of Kenya’s economy.”
Officials say the new directive is aimed at strengthening credit culture, ensuring sustainability, and expanding opportunities for micro, small, and medium-sized enterprises (MSMEs).
Meanwhile, the fund has accumulated Sh5 billion in savings, underscoring its potential to boost financial inclusion despite persistent default challenges.
