The government has announced that about 9 million Kenyans who have defaulted on loans from the Hustler Fund will be denied access to the Social Health Authority (SHA) Lipa Pole Pole initiative and other state credit facilities.
The Fund, which was launched three years ago, has registered 26.5 million members to date.
Principal Secretary in the State Department of Micro, Small and Medium Enterprises Development, Susan Mang’eni, said the total defaulted amount has slightly reduced to Sh5 billion, down from Sh6 billion.
She emphasized that those who deliberately refuse to repay their loans will face consequences.
“If you do not pay back, then you are denying others an opportunity to use the facility. You are categorised as criminals,” stated Mang’eni.
PS Mang’eni clarified that the government is willing to extend financial amnesty to defaulters willing to settle their Hustler Fund loans.
“We don’t have a problem with those who can’t pay because of many factors, including inflation… but to those purposely refusing and saying we won’t pay, we will seek alternative means like preventing them from accessing services such as SHA,” she added.
Last month, President William Ruto fired back at Hustler Fund critics, saying that his policies are based on well-informed strategies and he will not welcome sentiments from naysayers.
Speaking during a roundtable with the private sector in Nairobi, President Ruto took issue with those who have been disputing the success of the Fund, even terming it a failed plan.
Ruto maintained that the empowerment initiative has disbursed over Sh72 billion to 26 million Kenyans, mobilised over Sh5 billion in savings, and provided vital working capital to millions of micro-entrepreneurs.
He maintained that the fund has significantly benefited small businesses through micro-loans, urging Kenyans not to buy into their ill rhetoric.
President Ruto argued that the alleged 60% default rate is spreading falsehood and "a deliberate distortion of facts".
"The truth - backed by data - is that the Hustler Fund has a recovery rate of 83.3%, nearly identical to that of the formal banking sector, whose repayment rate stands at 83.6%."
A report by the Kenya Human Rights Commission (KHRC) warned that the programme is a recipe for financial failure as it lacks a sustainable plan to empower Kenyans at the bottom of the pyramid, as earlier intended.
President Ruto maintained that he will not allow distraction from "the merchants of doom and negativity" and will remain committed in creating effective reforms.
