President William Rutos’ financial inclusion adviser Moses, Banda has revealed that 29% of the KSh 10.2 billion outstanding Hustler Fund loan has been defaulted.
In addition, this means that approximately Ksh2.9 billion of the Hustler Fund was non-performing, indicating the challenges faced by borrowers.
Banda further disclosed that Kenyans borrowed over Ksh30 billion from the fund since it was launched in November 2022 by President Ruto.
“Out of the KSh 33 billion that has been lent out (under the Hustler Fund), the outstanding loan book is about KSh 10.2 billion; remember, these are short-term loans, so they get repaid pretty fast. Of the outstanding amount, 29% is not performing on time,” Business Daily quoted Banda.
How can the Government deal with defaulters?
In June, President Ruto promised to go after Hustler Fund loan defaulters.
President Ruto was frank and went on to confirm that the KSh50 billion kitty he launched faced bad loan challenges.
Consequently, speaking during a church service in Kajiado County on Sunday, June 25, 2013, President Ruto warned those not servicing the loan.
He emphasized that their days were numbered in the event they failed to follow up with payment.
“A few Hustler Fund borrowers think they are clever. I know where I will catch them… those who take the loan and refuse to pay. They have learnt that we have rolled out the Hustler Fund for chama’s and are now lining up in some of the groups,” said Ruto.
So why Kenya will borrow from Word Bank?
On Friday, August 18, President Ruto’s administration initiated talks with the World Bank for a KSh20 billion loan to finance the Hustler Fund.
According to Bloomberg, the loan will go towards supporting small enterprises.
What is the solution?
The Government intends to loan KSh200 billion to hustlers over the next five-year cycle.
Looking forward, co-operatives and Micro, Small and Medium Enterprises Development Cabinet Secretary (CS) Simon Chelugui said the Treasury will invest KSh10 billion in the Fund by June 2024.
Nevertheless, the Kenya Kwanza Alliance administration was also in talks with the European Union (EU) and the US Agency for International Development to finance its flagship project.
With all this in perspective, will the hustler fund succeed or end up as a giant bubble that will eventually burst at the taxpayer’s expense?