Government Moves to Block Bank Loan for Hustler Fund Defaulters
The Ministry of Cooperatives and Small and Medium Enterprises (MSMEs) has announced that Kenyans who fail to repay their Hustler Fund loans will now be blocked from accessing credit facilities in banks.
Speaking in Mombasa on Wednesday, September 10, Cooperatives Cabinet Secretary Wycliffe Oparanya said banks will henceforth verify whether a borrower has cleared their Hustler Fund obligations before approving any loan application.
According to the CS, the directive is meant to strengthen accountability and encourage repayment discipline among Kenyans who have benefited from the fund.
“If you have not repaid the Hustler Fund, and when you go to any bank, you will be deemed ineligible for a loan because you cannot borrow and repay it, so they will not give you any loan,” Oparanya said.
Since its inception in 2022, the Hustler Fund has disbursed nearly Ksh70 billion to over 26 million Kenyans, targeting micro, small and medium enterprises across the country.
But repayment remains a major challenge. A Kenya Human Rights Commission report, Failing the Hustlers, showed that by end of 2022, the default rate was 68.3 per cent—meaning approximately Ksh340 was lost for every Ksh500 disbursed.
President William Ruto has disputed these figures, saying the fund has a repayment rate of over 83 per cent, painting a more rosy picture of its performance.
The announcement comes a week after CS Oparanya appointed Henry Tanui as the new Chief Executive Officer of the Hustler Fund, replacing Elizabeth Nkukuu. The CS expressed confidence in Tanui’s leadership, saying the appointment was part of reforms to improve the fund’s efficiency.
“I encourage the Hustler Fund team to work harder in promoting timely repayments to improve credit scores and to expand financial literacy programmes that support Kenyans,” Oparanya said.
Tanui, while acknowledging the repayment challenges of the past three years, said he will focus on reengineering collection systems, improving financial literacy and expanding lending channels to strengthen the fund’s impact.
“My focus will be on reengineering our collection processes, strengthening financial literacy and building ecosystem lending channels that expand our reach and deepen our impact,” Tanui said.So now millions will have to pay up or be locked out.
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Government Moves to Block Bank Loan for Hustler Fund Defaulters