The State Department for Micro, Small, and Medium Enterprises (MSMEs) has asked the National Assembly to approve KSh300 million to help recover unpaid loans under the Hustler Fund, which currently stand at KSh12.5 billion.
The funds will mainly support public awareness and sensitization campaigns aimed at encouraging borrowers to repay their loans.
MPs Question the Request
During a parliamentary session on March 12, Funyula MP Wilberforce Oundo questioned the request, describing it as a “curious” proposal for recovering public funds.
Responding to lawmakers, Hustler Fund CEO Henry Tanui explained that the money will not be used for legal action against defaulters.
“We don’t take legal action, we don’t arrest them, but we reach out in a humane way and explain the benefits of the fund,” Tanui told Parliament.
Outstanding Loans
According to the department, about KSh83 billion has been disbursed to borrowers since the launch of the Hustler Fund.
However, only KSh71 billion has been repaid, leaving KSh12.5 billion still unpaid.
Officials say the awareness campaigns are meant to encourage voluntary repayment while maintaining the program’s goal of supporting small businesses and ordinary Kenyans.
Other Budget Requests
Apart from the KSh300 million for loan recovery, the department has also requested additional funding for various operational needs, including:
KSh27 million to recruit technical staff to manage the fund
KSh156 million to facilitate constituency WESO fund committees
KSh100 million for office equipment
KSh100 million to finalize key policies related to the program
New Plan to Track Defaulters
Earlier on March 5, CEO Henry Tanui revealed that the fund is introducing new methods to track borrowers who fail to repay loans.
The plan involves using borrowers’ National ID numbers and location data to identify defaulters.
Tanui said the fund has already received approval from the Office of the Data Protection Commissioner to access records for nearly 20 million registered users.
According to him, the move is meant to prevent borrowers from avoiding repayment by changing phone numbers or discarding SIM cards.
The announcement comes as lawmakers raise concerns about repayment discipline in the Hustler Fund program, which was designed to expand access to credit for small businesses and low-income earners.
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