KENYA: Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Cabinet secretary, Wycliffe Oparanya has Pleaded with Kenyans who have defaulted on Hustler Fund Loans to repay.
0paranya, calling for co-operation, revealed that the defaulters have resulted in limited access to short term loans by small businesses in the country.
Speaking while accompanying President William Ruto on his development tour of the Western Kenya Region, Oparanya stated that Kenyans have been enquiring how they can access loans, a solution that the hustler fund can provide.
The crowd of the rally attendees however, heckled the Cabinet Secretary, shouting they will not be repaying the hustler fund loan.
Earlier this Month, Oparanya revealed the Government plans to start tracking down Hustler Fund loan defaulters in a bid to recover the disbursed funds.
According to the National Treasury data, 94 per cent of the 22 million borrowers defaulted in making their payments resulting in the government’s disbursements decreasing drastically by 93.3 per cent in 2024, to fall at Sh800 million.
According to Oparanya, this has in return slowed down the growth of small businesses. The Cs stated that government will be tracing the defaulters, who have clinged on cash that would be used to support individuals and businesses with good credit score.
“For those 19 million people, I am coming for you to make sure that you pay so that other borrowers can benefit too,” said Oparanya.
The Cabinet Secretary revealed that majority of the Hustler Funds loans borrowers are Youths and that more Men have been borrowing the fund compared to women.
According to the Cs, Women represent 48 Per cent of the Beneficiaries while men represent 52 Per Cent. Youths, represent 61.2 Per Cent, 9.4 Per Cent are the elderly aged above sixty years, while the remaining are aged between 40 and 59 years.
The Cooperatives CS noted that the cash borrowed from the Fund is public money that should be repaid for others to enjoy the benefits.
During his State of the Nation Address in Parliament in November last year, President Ruto highlighted hustler Fund as one of his administration's achievement on financial inclusion.
Ruto, revealed that to mark hustler Fund’s second anniversary, his administration has taken a bold step by launching a third product specifically tailored to the Small and Medium Enterprises sector.
The new initiative will initially target 2 million beneficiaries who have demonstrated a strong credit history with the Hustler Fund. By doing so, his administration aims to create a pathway for entrepreneurs to transition into the formal banking system, thereby deepening financial inclusion and strengthening the SME sector.
Ruto, stated that this milestone underscores his administration's commitment to building a financially inclusive and economically resilient nation.
President Ruto insisted they have prioritized the empowerment of Kenyans within the informal economy by unlocking their potential through targeted investments. These include accessible loans, capacity building programmes and regulatory reforms designed to ease growth.
However, Critics argue the Fund's real Purpose is not being met.
The fund's sustainability crisis stems primarily from borrowers using the loans for household consumption rather than business development, with nearly 70% of small business owners using the microloans for household expenses and only 18.1% investing in their businesses.
The small loan amounts, ranging from Ksh500 ($3.9) to Ksh1,000 ($7.8), prove insufficient for meaningful business capital, contradicting the fund's intended purpose of helping "hustlers" escape poverty through entrepreneurship.
The Hustler Fund, is a government-run microcredit scheme launched by President William Ruto in 2022 with a budget of Ksh50 billion ($409 million) annually over five years.
The Ministry of Co-operatives and MSMEs projects loan disbursements to reach Sh60 billion by 2025/2026, with personal savings expected to hit Sh3.88 billion and micro-enterprise savings reaching Sh2 billion.