Loan Defaulters Risk Losing Access to Bank Credit, CS Oparanya Says
The Ministry of Cooperatives and Small and Medium Enterprises (MSMEs) has issued a tough warning to Kenyans who have failed to repay their Hustler Fund loans.
According to the ministry, defaulters will soon face serious consequences as banks will block them from accessing loans.
Speaking during an event in Mombasa on Wednesday, September 10, Cooperatives Cabinet Secretary Wycliffe Oparanya revealed that banks will now start cross-checking whether an individual has cleared their Hustler Fund debt before processing any new loan application.
Oparanya explained that the new directive is aimed at enforcing accountability and discipline among borrowers, ensuring that Kenyans pay back what they owe. He stressed that one cannot expect to default on government loans and still walk into a bank expecting credit facilities.
“Since 2022, nearly Ksh70 billion has been issued to more than 26 million Kenyans through the Hustler Fund, with the main goal of empowering micro, small, and medium businesses across the country.
But if you have not paid back your Hustler Fund loan, when you walk into any bank, you will automatically be seen as a high-risk borrower.
Banks will simply decline your application because you cannot be trusted to repay,” Oparanya warned.
A recent report by the Kenya Human Rights Commission (KHRC), titled “Failing the Hustlers”, painted a worrying picture, revealing that by the end of 2022, the default rate had risen to 68.3 per cent.
This means that for every Ksh500 issued through the fund, around Ksh340 had gone unpaid.
However, President William Ruto quickly dismissed the KHRC findings, insisting that repayment rates remain strong.
According to him, the fund is achieving repayment rates of over 83 per cent, contrary to claims of widespread default.
Just a week earlier, on Wednesday, September 3, Oparanya officially unveiled Henry Tanui as the new Chief Executive Officer of the Hustler Fund. Tanui takes over from Elizabeth Nkukuu, the outgoing CEO.
The CS said the leadership shake-up is part of government efforts to make the fund more effective and sustainable.
Oparanya expressed confidence in the new CEO, urging him and the Hustler Fund team to strengthen efforts aimed at improving loan recovery, boosting repayment culture, and promoting financial literacy programs.
“I encourage the Hustler Fund team to double down on repayment drives, improve Kenyans’ credit scores, and roll out financial literacy initiatives that will help people manage money better,” the CS said.
In his acceptance speech, Tanui acknowledged that the fund has faced challenges in its first three years, especially around repayment and collection systems.
But he struck an optimistic tone about the future, promising to rebuild confidence in the project.
“My focus will be on restructuring the collection processes, expanding financial literacy across communities, and creating better lending networks to extend our reach.
This way, we can support more Kenyans and make the Hustler Fund truly impactful,” Tanui stated.
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