Some 10 million hustlers borrowed Sh6 billion and vanished. The government is now contemplating writing off the ‘bad debts’.
According to Micro Small and Medium Enterprises (MSMEs) Development Principal Secretary Susan Mang’eni, Kenyans in this category borrowed the money once or twice in November and December 2022 immediately after the Hustler Fund was launched.
“Repayment rate for personal loans is at 80 per cent. However, we had at least 10 million Kenyans who borrowed as low as Sh500 either once or twice and they did not pay. The money at risk here is about Sh6 billion,” she said.
Mang’eni spoke on Wednesday before the Departmental Committee on Trade, Industry and Cooperative, chaired by Ikolomani MP Bernard Shinali.
The PS explained that so far, Sh53.8 billion has been repaid out of Sh65.5 billion loans taken, with the remainder either defaulted or borrowers increasing the repayment period. “Those people who have not paid have been graded as bad borrowers and are not eligible to take loans at the moment,” she said.
The committee however wondered why the state department requires additional funding yet they have the capacity to collect Sh5 billion from defaulters. “If the department has unrecovered billions and a Sh65 billion revolving fund, why does she want us to give her additional Sh5 billion” posed Aldai MP Marriane Keitany.
Kajiado South MP Samuel Parashina said that the hustler fund concept is still not clear and termed it as a ‘joke’. “We have never been satisfied with these hustlers’ funds. This money is a joke and we would like you to take it to other funds. The hustler fund is a joke I cannot even explain.”
Auditor General Nancy Gathungu revealed that the Fund is faced with financial improprieties, with her 2023/2024 financial year audit report indicating that the fund has non-performing loans of about Sh8 billion that could be written off, since they have not been serviced for the last year and 64 per cent of the money borrowed not being repaid.
Ms Mang’eni told the committee that over 4.9 million Kenyans have gone through mean testing and are eligible for insurance premium financing.
“We are integrating insurance premium financing products on the Hustler Fund platform to give our beneficiaries an opportunity to borrow for annualised SHA premiums within their current limits towards realising access to universal healthcare. We are also in discussion with the Housing State department towards co-creating a product for affordable housing to unlock home ownership opportunities for good borrowers,” the PS explained.
But Mang’eni said they require an additional Sh5 billion to actualise the projects yet they have an allocation of Sh1 billion in next year’s budget.
Some 10 million hustlers borrowed Sh6 billion and vanished. The government is now contemplating writing off the ‘bad debts’.
According to Micro Small and Medium Enterprises (MSMEs) Development Principal Secretary Susan Mang’eni, Kenyans in this category borrowed the money once or twice in November and December 2022 immediately after the Hustler Fund was launched.
“Repayment rate for personal loans is at 80 per cent. However, we had at least 10 million Kenyans who borrowed as low as Sh500 either once or twice and they did not pay. The money at risk here is about Sh6 billion,” she said.
Mang’eni spoke on Wednesday before the Departmental Committee on Trade, Industry and Cooperative, chaired by Ikolomani MP Bernard Shinali.
The PS explained that so far, Sh53.8 billion has been repaid out of Sh65.5 billion loans taken, with the remainder either defaulted or borrowers increasing the repayment period. “Those people who have not paid have been graded as bad borrowers and are
not eligible to take loans
at the moment,” she said.
The committee however wondered why the state department requires additional funding yet they have the capacity to collect Sh5 billion from defaulters. “If the department has unrecovered billions and a Sh65 billion revolving fund, why does she want us to give her additional Sh5 billion” posed Aldai MP Marriane Keitany.
Kajiado South MP Samuel Parashina said that the hustler fund concept is still not clear and termed it as a ‘joke’. “We have never been satisfied with these hustlers’ funds. This money is a joke and we would like you to take it to other funds. The hustler fund is a joke I cannot even explain.”
Auditor General Nancy Gathungu revealed that the Fund is faced with financial improprieties, with her 2023/2024 financial year audit report indicating that the fund has non-performing loans of about Sh8 billion that could be written off, since they have not been serviced for the last year and 64 per cent of the money borrowed not being repaid.
Ms Mang’eni told the committee that over 4.9 million Kenyans have
gone through mean testing
and are eligible for insurance premium financing.
“We are integrating insurance premium financing products on the Hustler Fund platform to give our beneficiaries an opportunity to borrow for annualised SHA premiums within their current limits towards realising access to universal healthcare. We are also in discussion with the Housing State department towards co-creating a product for affordable housing to unlock home ownership opportunities for good borrowers,” the PS explained.
But Mang’eni said they require an additional Sh5 billion to actualise the projects yet they have an allocation of Sh1 billion in next year’s budget.
By Irene Githinji