Govt Clarifies Plotting To Raid Mobile Money Accounts To Recover Ksh7B From Hustler Fund Defaulters
This clarification followed media reports that went viral that the recovery process would lead to decisive measures being considered through intermediaries such as banks and mobile service providers
Marvin Chege 
The government has moved to quell fears that the names, amounts owed and telephone numbers of Kenyans who defaulted on Hustler Fund loans will be used in recovering Ksh7 billion in unpaid loans from the Hustler Fund by all means, targeting over 13 million defaulters.
In a statement on Wednesday evening, October 2, MSMEs Development Principal Secretary Susan Mang’eni assured members of the public that the default recovery measures under consideration will be in line with the laws of Kenya and in strict adherence to data protection laws.
This clarification followed media reports that went viral that the recovery process would lead to decisive measures being considered through intermediaries such as banks and mobile service providers, raising worry regarding the protection of the personal data of defaulters with such a move putting that protection in danger.
According to PS Mang'eni, although intermediary service providers such as banks and telecommunication companies assist in implementing the fund, they do not own the financial product, which is fully government-owned and operates under Kenyan law. Loans totalling over Ksh57.8 billion have so far been disbursed, out of which Ksh45.5 billion has been repaid.
MSMEs Development Principal Secretary Susan Mang’eni during a previous address. /FILE
“The Hustler Fund is separate from the banks and mobile money wallets. The Fund is not offered as part of Intermediaries financial product portfolio but rather offered as service from the intermediaries to the Fund,” she stated.
“The Fund is fully owned by the government and implemented in adherence to the laws of Kenya. The Hustler Fund clients belong to the Fund and not the intermediaries.”
The Financial Inclusion Fund, the 'Hustler Fund' was launched in November 2022 as a policy intervention in the mainstream Financial Market to unlock access to credit at the bottom of the economic pyramid.
PS Mang'eni added that the government through the Ministry of Cooperatives Micro, Small and Medium Enterprises (MSMEs) Development, engaged various intermediary service providers including banks and all Telcos in Kenya to collaboratively develop and support the implementation of the Hustler Fund.
According to her, "The default recovery measures under consideration will be in line with laws of Kenya and particularly in strict adherence to data protection laws." Nonetheless, she urged borrowers to repay their loans promptly to enhance their credit scores, which will enable access to higher loan limits in the future.
"The Hustler Fund Service providers partners' role remains provision of technology. We wish to assure Kenyans that the government remains committed to the adherence of data protection laws and the default recovery measures will be within the law," she urged, adding "We also encourage Kenyans to repay their loans on time to build their individual credit score for higher loan limit access."
During a session with the National Assembly's Special Funds Committee, Elizabeth Nkukuu, the acting CEO of the Hustler Fund, revealed that discussions were ongoing with top telcos to facilitate this recovery process.
The government identified the defaulters, primarily those who borrowed funds in the initial months after the fund's launch in November 2022. Nkukuu emphasised that many of these individuals have the financial means to repay their loans but have chosen not to do so, stating, "It’s not that they cannot pay. They are people who just don’t want to pay."
The fund aims to provide affordable credit to individuals previously excluded from mainstream financial systems. Each loan carries an interest rate of 8 percent, with 5 percent retained for savings, which has accumulated to Ksh3.5 billion.
Nkukuu indicated that legal avenues will be pursued if voluntary repayment does not occur after initial reminders, going on to state that the government may hence be forced to use a 'nagging' technique which would involve frequent reminders via phone calls before deciding to raid Kenyans' mobile money accounts and even deduct their airtime.
