The Ministry of Cooperatives and MSMEs Development has issued a clarification on the hustler fund defaulter loan recovery measure.
State Department for MSMEs and Development Principal Secretary (PS) Susan Mang’eni issued a statement on October 2 after reports emerged that the government plans to forcefully recover the loans from defaulters Mpesa and airtime.
Mang’eni explained that the default recovery measures under consideration will be in line with laws of Kenya and particularly in strict adherence to data protection laws.
The PS said the Hustler Fund Service providers partners’ role remain provision of technology.
She assured Kenyans that the government remains committed to the adherence of data protection laws adding that the default recovery measures will be within the law.
“The Hustler Fund is separate from the banks and mobile money wallets. The Fund is not offered as part of Intermediaries financial product portfolio but rather offered as service from the intermediaries to the Fund,” she said.
Mang’eni said the Fund is fully owned by the government and implemented in adherence to the laws of Kenya.
Therefore, the PS reiterated that the Hustler Fund clients belong to the Fund and not the intermediaries.
However, she encouraged Kenyans to repay their loans on time to build their individual credit score for higher loan limit access.
“We remain dedicated in ensuring that the Fund grows and deepens financial inclusion at the Bottom of Economic pyramid,” she said.
Also Read: Govt to Roll Out New Hustler Fund Loan
Hustler Fund MPESA & Airtime Recover plans
This comes after Financial Inclusion Fund (Hustler Fund) acting CEO Elizabeth Nkuku told the National Assembly’s Special Funds Account Committee that the government was planning to forcefully recover the Ksh7 billion in loans that has not been paid so far.
Nkuku said, 13 million Kenyans have defaulted in paying their loans, thus the government could be forced to raid defaulters M-Pesa accounts and even deduct airtime.
“They are mostly people who borrowed in the first and second months and the default amount is about Ksh.7 billion. What we are looking at is to get money from their M-Pesa or airtime, we are in the process of considering appropriate legal provision,” Nkuku told the MPs.
Nkuku informed the committee that most defaulters are capable Kenyans who can repay the loan, with account reviews showing they transact an average of Ksh21,000.
“The beauty of this Fund is that we have the phone numbers and the unique identifiers of the defaulters, the national ID. They are people of means, people who just don’t want to repay,” she said.
Also Read: Govt Targets MPESA & Airtime of Hustler Funds Defaulters in Looming Crackdown
About the Fund
The Financial Inclusion Fund, the ‘Hustler Fund’ was launched in November 2022 as a policy intervention in the mainstream Financial Market to unlock access to credit at the bottom of the economic pyramid.
The government through the Ministry of Cooperatives & MSMEs Development, engaged various intermediary service providers including banks and all Telcos in Kenya to collaboratively develop and support the implementation of the Hustler Fund.
Since inception, the Fund has disbursed loans amounting to more than Kshs.57.8billion out of which Kshs.45.5billion has been repaid.
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