Ruto's Government Declares Harsh Form Of Punishment For Over 9 Million Hustler Fund Defaulters

The government has taken a firm position on the growing number of Hustler Fund defaulters, warning that those who deliberately fail to repay will face legal action and be locked out of future state-backed credit.

Principal Secretary for Micro, Small and Medium Enterprises Development, Susan Mang’eni, said the administration cannot allow borrowers to treat public funds as free money.

Speaking during a televised interview, she explained that nearly nine million Kenyans have defaulted, with some owing as little as KSh 500 but refusing to clear the balance.

“For close to three years, the fund has been running.

If someone is alive, took a loan, and simply refuses to repay, that is no longer just a financial issue. It becomes a criminal matter,” she said.

Mang’eni noted that the Hustler Fund was designed to empower small traders and low-income families by giving them access to affordable credit.

Since its launch in November 2022, it has registered 26.5 million users and disbursed KSh 65.7 billion.

Out of this, KSh 53.2 billion has been repaid, leaving about KSh 5 billion in defaults.

According to her, the government is distinguishing between genuine cases of hardship and deliberate refusal to pay.

Those unable to meet their obligations due to job loss, inflation, or unexpected family emergencies will be given room to restructure their loans.

But those who openly avoid repayment will face exclusion from other government credit schemes, including the Social Health Authority’s Lipa Pole Pole programme.

The move aims to protect the sustainability of state lending programmes and ensure fairness for millions of Kenyans who repay on time.

“When some people refuse to pay, it denies others access to the same opportunity. That is why we are taking firm steps to stop this culture,” Mang’eni explained.

Analysts see this decision as an effort to instill financial discipline among borrowers while safeguarding taxpayers’ money.

The Hustler Fund has played a crucial role in providing quick loans to small businesses, but the high rate of default threatens its future.

By linking loan repayment with access to other government services, authorities are signaling that public credit must be treated with responsibility.