Government responds on reports of planned forceful recovery of Hustler Fund loans
The Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development has sought to clarify reports on defaulter loan recovery measures for the Hustler Fund
The Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development has sought to clarify reports on defaulter loan recovery measures for the Hustler Fund.
MSMEs Development Principal Secretary Susan Mang’eni, in a statement to newsrooms on Wednesday, noted that although intermediary service providers such as banks and telecommunication companies assist in implementing the fund, they do not own the financial product.
PS Mang’eni stated that the Hustler Fund is fully government-owned and operates under Kenyan law, further noting that loans totaling over Ksh.57.8 billion have so far been disbursed, out of which Ksh.45.5 billion has been repaid.
“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.”
PS Mang’eni also stated that any default recovery measures will strictly adhere to national data protection laws, noting that service providers’ role remains purely technological, without involvement in customer financial portfolios.
She went ahead to urge borrowers to repay their loans promptly to enhance their credit scores, which will enable access to higher loan limits in the future.
“The default recovery measures under consideration will be in line with laws of Kenya and particularly in strict adherence to data protection laws. The Hustler Fund Service providers partners’ role remain provision of technology,” said the PS.
“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.”
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PS Mang’eni added: “We also encourage Kenyans to repay their loans on time to build their individual credit score for higher loan limit access. We remain dedicated in ensuring that the Fund grows, and deepens financial inclusion at the Bottom of Economic pyramid.”
The statement comes after Hustler Fund Acting CEO Elizabeth Nkuku, appearing before a Parliamentary committee on Tuesday, intimated that the government was mulling forceful recovery of monies owed by Kenyans who took loans from the fund.
Ms. Nkuku stated that 13 million Kenyans have defaulted in paying their loans, adding that the government may hence be forced to raid their M-Pesa accounts and even deduct their airtime.
“What we are looking at is to get money from their M-Pesa or airtime, we are in the process of considering appropriate legal provision,” she told the MPs.
“The beauty of this Fund is that we have the phone numbers and the unique identifiers of the defaulters, the national ID. They are people of means, people who just don’t want to repay.”
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