The Ministry of Cooperatives and Small and Medium Enterprises (MSMEs) has announced tough new measures to ensure repayment of Hustler Fund loans, warning that Kenyans who fail to pay back will be barred from accessing loans from commercial banks.
Speaking in Mombasa on Wednesday, September 10, Cooperatives Cabinet Secretary Wycliffe Oparanya revealed that banks will now be required to check an individual’s Hustler Fund repayment status before approving any loan application.
According to Oparanya, the move is aimed at holding borrowers accountable and reducing the default rate on the Hustler Fund, which was established in 2022 to support micro, small, and medium enterprises (MSMEs) across Kenya.
“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 warned.
Since its inception, nearly Ksh70 billion has been distributed to over 26 million Kenyans. However, a recent report by the Kenya Human Rights Commission (KHRC), titled Failing the Hustlers, revealed a default rate of 68.3 per cent by the end of 2022 — indicating that approximately Ksh340 is lost for every Ksh500 disbursed.
President William Ruto has since denied the KHRC’s claims, insisting that the fund enjoys an over 83 per cent repayment rate.
Just a week earlier, on Wednesday, September 3, Oparanya introduced Henry Tanui as the new Chief Executive Officer of the Hustler Fund, replacing Elizabeth Nkukuu.
The CS expressed confidence in the new CEO, noting that the appointment was part of a wider government initiative to improve the fund’s efficiency.
“I encourage the Hustler Fund team to enhance their efforts in promoting timely repayments to improve credit scores and to expand financial literacy programmes that support Kenyans in succeeding,” Oparanya said.
Tanui, while acknowledging challenges faced by the fund over the past three years — including loan recovery — pledged to reengineer the collection processes and strengthen financial literacy efforts.
“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 stated.
With the new measures, Kenyans seeking bank loans may now need to clear their Hustler Fund arrears first, signaling a significant shift in the country’s credit market and a renewed push to ensure repayment compliance.