Government to Target M-Pesa Accounts of Hustler Fund Defaulters

The Kenyan government is preparing to take significant measures to recover Sh7 billion from borrowers who have defaulted on loans from the Hustler Fund.

This initiative will involve accessing M-Pesa accounts and potentially deducting funds directly from individuals’ mobile money transactions, including airtime top-ups, in a bid to sustain the financial assistance program.

Since the launch of the Hustler Fund, which aims to foster financial inclusion among low-income earners, approximately 13 million Kenyans have taken out loans. However, many have not met their repayment obligations, raising concerns about the financial health of the initiative.

Elizabeth Nkukuu, the acting CEO of the Financial Inclusion Fund, made a striking statement during an appearance before the National Assembly’s Special Funds Account Committee.

She indicated that the recovery process has reached an impasse, particularly noting that the majority of defaulters took loans in the initial months following the fund’s launch. “The default amount is about Sh7 billion,” Nkukuu informed lawmakers.

Launched on November 30, 2022, by President William Ruto, the Hustler Fund was established with a seed capital of Sh12 billion to support those at the lower end of Kenya’s economic spectrum. However, the initiatives have faced scrutiny as the operational challenges unfolded.

As recovery efforts intensify, the government faces a critical juncture in ensuring the longevity and success of the Hustler Fund while navigating the complex issue of loan defaults, thereby safeguarding taxpayer interests.