The State Department for Micro, Small, and Medium Enterprises (MSMEs) has asked the National Assembly for KSh 300 million to recover unpaid loans under the Hustler Fund, which currently totals KSh 12.5 billion.
The funds are earmarked for awareness and sensitization campaigns to encourage defaulters to repay their loans.
Member of Parliament for Funyula, Wilberforce Oundo, termed the request a “curious” one for the recovery of the Hustler Fund loans.
Responding to questions from legislators on March 12, the Hustler Fund CEO said that, despite the large sum proposed for debt recovery, the department does not plan to take legal action against defaulters.
Instead, the funds will be used for sensitization and awareness campaigns.
“We don’t take legal action, we don’t arrest them, but we reach out in a humane way, and we sell the benefits of the fund,” Tanui told the parliament.
How Govt Will Collect Hustler Fund Loans From Kenyans
For borrowers who remain unresponsive, the fund will commence a phased enforcement process, including forwarding accounts to dedicated debt collection or debt collection agencies as a final recourse.”
Out of KSh 83 billion disbursed to borrowers, only KSh 71 billion has been repaid, leaving KSh 12.5 billion outstanding.
Apart from the KSh 300 million earmarked for loan recovery, the department has requested KSh 27 million to recruit technical personnel to manage the fund.
Also Read: Hustler Fund to Use National ID Card Data to Track Loan Defaulters
It has also sought KSh 156 million to facilitate constituency WESO fund committees, KSh 100 million for office equipment, and an additional KSh 100 million to finalize key policies.
On March 5, Henry Tanui said that the fund is exploring new mechanisms to recover outstanding loans.
The new recovery approach will involve using borrowers’ National ID and location data to track defaulters.
Also Read: Govt Mulls Denying 9 Million Hustler Fund Defaulters SHA Lipa Pole Pole Services
The CEO revealed that the fund has secured approval from the Office of the Data Protection Commissioner to access records for about twenty million registrants.
“The people who borrowed and thought they can disappear, they can’t because their IDs are linked to the loans,” Tanui said.
According to Tanui, the strategy is aimed at strengthening monitoring and preventing borrowers from evading repayment by changing phone numbers or discarding SIM cards.
The revelation came as Members of Parliament (MPs) expressed concern over the use of public funds and the repayment discipline of the Hustler Fund, noting that a programme designed to expand credit access for ordinary Kenyans still has about Ksh12 billion outstanding.
