The government is considering writing off defaulted Hustler Fund loans totaling up to Ksh.6 billion, Principal Secretary for Micro, Small and Medium Enterprises Development Susan Mang’eni has announced. The loans, issued to 10 million Kenyans in 2022, remain unpaid more than two years later.
While appearing before the National Assembly’s Committee on Trade, Industry and Cooperatives, Mang’eni confirmed that the borrowers failed to repay the loans, prompting the ministry to propose a write-off to clean up the fund’s risky loan portfolio.
“They never repaid, and that is what we will be seeking to write off,” Mang’eni told the committee. “The portfolio that is totally at risk and is in default is about between Ksh.5 billion and Ksh.6 billion.”
Despite the default rate, Mang’eni defended the overall performance of President William Ruto’s flagship Hustler Fund, pointing out that 9 million Kenyans continue to borrow and repay their loans consistently. So far, the fund has disbursed Ksh.65.7 billion, with repayments standing at Ksh.53.2 billion.
She urged MPs to approve an additional Ksh.5 billion for the next financial year, saying the extra funding is crucial for scaling the program. According to the PS, many borrowers have grown their limits through good repayment behavior and now qualify for larger loans.
“Those who are doing better — we need to enhance their limit,” she said. “The moment you enhance someone’s limit from Ksh.500 to Ksh.10,000, you have to fund, and that is why we are asking for additional funding — to fund the 4.5 million who will be graduating to the bridge and at the same time take care of the new applicants who are onboarding Hustler Fund every day.”
However, MPs expressed skepticism over the fund’s long-term viability. Starehe MP Amos Mwago warned that the write-off plan could sink the government deeper into debt at a time when the economy is already under pressure.
“At this rate, I think you’re going to dive into something else. We cannot afford to be writing Ksh.6 billion for you,” Mwago told the ministry.
In response, Mang’eni said the ministry is exploring legal reforms that would allow for forceful recovery of unpaid loans. She emphasized that these changes would strengthen the fund’s sustainability and extend its benefits to more deserving Kenyans.
