The government is under scrutiny for requesting an additional Sh5 billion to bolster the Hustler Fund, even as Sh6 billion remains unpaid by nearly 10 million borrowers who have disappeared.
The revelation, made during a parliamentary committee session, has sparked heated debate over the sustainability of the flagship financial inclusion programme championed by President William Ruto.
The Principal Secretary of the State Department for Co-operatives and MSME Development, Susan Mang’eni, disclosed to the National Assembly’s Trade Committee that Sh5 billion to Sh6.3 billion is at risk of being written off if ongoing recovery efforts fail.
“About 10 million Kenyans borrowed Sh500 in late 2022 and vanished without repaying,” she said. While tracing efforts are underway, Mang’eni admitted the government may eventually seek a waiver for the Sh6 billion defaulted amount.
Launched in 2022 to provide affordable credit to low-income earners, the Hustler Fund has enrolled 25.8 million users, but only 9 million are classified as “good borrowers.”
Initially offering loans from Sh500 to Sh50,000 at an annual interest rate of 8 percent, the programme has since adjusted rates upwards for repeat borrowers.
Despite lending Sh65.7 billion and recovering Sh33.2 billion, the fund’s budget for 2025/26 was slashed to Sh1 billion from Sh2 billion, prompting the urgent request for additional funding.
Lawmakers, however, questioned the rationale behind injecting more taxpayer money into the initiative. “Why allocate Sh5 billion more when billions are already lost? Constituents view these loans as ‘thank-you gifts’ from the government,” argued committee vice-chairperson Maryanne Keitany.
Committee chair Bernard Shinali demanded clarity on recovery strategies, while MPs Samuel Parashina and Joyce Kamene criticised the fund’s management, citing “theft and misuse.”
Defending the request, Mang’eni highlighted plans to expand the fund’s scope, including insurance premium financing for Social Health Authority contributions and affordable housing products.
Over 4.9 million Kenyans have been pre-qualified for these services, necessitating increased capital. The fund is also integrated with youth empowerment programmes, positioning it as a “one-stop shop” for economic inclusion.
Despite these ambitions, the Treasury allocated only Sh5.59 billion to the MSME State Department for 2025/26, with Sh3.76 billion earmarked for development. The disconnect between funding gaps and default risks has left legislators sceptical.
As recovery efforts continue, the Hustler Fund’s future hinges on balancing financial accountability with its mission to uplift marginalised communities.
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