State Targets M-Pesa Accounts and Airtime of 13 Million Hustler Fund Defaulters to Recover Sh7 Billion
Thirteen million defaulters of the Hustler Fund will face deductions from their M-Pesa accounts and airtime as the State seeks to recover Sh7 billion in unpaid loans.
Elizabeth Nkukuu, the Acting CEO of Hustler Fund, informed a parliamentary committee that they are currently working with Safaricom on strategies to facilitate the recovery of this significant amount.
Speaking before the National Assembly’s Special Funds committee on Tuesday, Ms. Nkukuu explained that most defaulters had borrowed within the initial two months of the Fund’s launch.
“This discussion is ongoing with the mobile operator,” Ms. Nkukuu informed the committee.
She assured the team, led by Migori Women Representative Fatuma Mohammed, that information on defaulters is available and that all legal measures will be taken to recover the amounts owed.
So far, about 24 million Kenyans have borrowed Sh57.8 billion from the Fund, with two million maintaining good credit.
Ms. Nkukuu disclosed that five percent of every borrowed amount is retained for the borrowers’ savings, which has now reached Sh3.5 billion.
She also noted that the eight percent interest rate is shared among mobile operators, banks, and the secretariat, and is also used for the Fund’s growth.
Defaulters With Means
Ms. Nkukuu revealed that most defaulters have the means to pay back their loans, as evidenced by their monthly financial activity.
“It’s not about the inability to pay. They just choose not to pay,” Ms. Nkukuu stated.
In addition to deductions from M-Pesa and airtime, she mentioned that the State will employ a “nagging” tactic, calling defaulters as reminders to repay their loans.
“Following this, we will resort to legal means to extract the funds from their wallets or airtime,” she added.
Ms. Nkukuu noted that 98 percent of defaulters are still active users, giving hope for successful recovery. However, for those who have passed away, who make up about two to three percent, no recovery is possible.
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Micro, Small, and Medium Enterprises Principal Secretary Susan Mang’eni supported these statements, emphasizing that defaulters have been given sufficient grace time.
“We are planning to segment them and begin forced recovery. We have their contact details, including mobile and ID numbers,” Ms. Mang’eni stated.
“If we had pursued them earlier, they could have argued it was premature, but now, with two years granted, they’ve had enough time.”
The Hustler Fund, launched in November 2022, was part of President William Ruto’s campaign promises ahead of the 2022 General Election. The program aims to provide affordable credit to individuals typically excluded from traditional financial institutions.
State Targets M-Pesa Accounts and Airtime of 13 Million Hustler Fund Defaulters to Recover Sh7 Billion
