Wycliffe Oparanya, the Cabinet Secretary for Co-Operatives and Micro, Small, and Medium Enterprises (MSME) Development, has called on Kenyans to prioritize the repayment of loans borrowed through the Hustler Fund. Speaking during the launch of a local foundation in Vihiga, Oparanya stressed the critical role of financial responsibility in ensuring the continuity of credit access for others within the program.
“Take loans, do your business, and repay. Because there is another who will use that money to do their business too. You cannot fail to repay loans,” Oparanya stated emphatically. He highlighted the government’s commitment to empowering small businesses but underscored that this could only be achieved if borrowers adhered to repayment obligations.
The Hustler Fund, introduced as a flagship initiative under President William Ruto’s administration, was designed to empower small-scale entrepreneurs and bolster Kenya’s economy through accessible, affordable credit. However, rising loan defaults threaten the fund’s sustainability, casting a shadow over its long-term viability.
Mounting Defaults Pose a Challenge
Reports indicate that as of October 2024, an estimated 13 million Kenyans had defaulted on their Hustler Fund loans, with arrears totaling Ksh.7 billion. This significant level of non-repayment has made it increasingly challenging for the government to maintain the operational efficiency of the fund and similar financial programs like the Uwezo Fund.
Kenyans’ inability to honor repayment schedules has raised concerns among policymakers and stakeholders. Critics argue that while the fund is a noble initiative, there may have been insufficient education on financial management and loan obligations for beneficiaries.
Proposed Legal Framework
To address the growing default rates, the government has proposed a legal framework targeting defaulters. If enacted, this framework would empower authorities to recover defaulted loans directly from borrowers’ M-Pesa accounts and mobile airtime balances. The recovery strategy aims to safeguard public funds and restore the integrity of government-backed credit programs.
While the proposal has sparked mixed reactions, proponents believe it is a necessary measure to curb indiscipline among borrowers. “This is not about punishing anyone,” said an unnamed government official. “It is about accountability and ensuring these funds remain accessible to those who need them the most.”
A Call to Embrace Government Initiatives
In his address, Oparanya encouraged entrepreneurs to embrace government financial programs as pathways to economic independence and growth. He argued that the Hustler Fund is not merely about providing credit but about fostering a culture of entrepreneurship and innovation among Kenya’s youth and small-scale business operators.
The Cabinet Secretary reiterated that financial literacy should accompany borrowing, enabling recipients to manage their businesses effectively and honor their loan obligations. “Financial responsibility is not just about paying back loans; it’s about creating a sustainable system where credit can flow to everyone who needs it,” Oparanya added.
Balancing Accessibility and Accountability
As the Hustler Fund navigates its challenges, the government faces the dual responsibility of maintaining accessibility to the fund while enforcing accountability among borrowers. Balancing these priorities will be critical to ensuring that initiatives like the Hustler Fund fulfill their mission of supporting small-scale businesses and promoting economic growth.
The Way Forward
With millions of Kenyans depending on credit facilities to sustain their businesses, the repayment culture will be a key determinant of the success of such programs. Oparanya’s call to action serves as a timely reminder of the collective responsibility required to make the Hustler Fund a sustainable venture.
By repaying loans, borrowers not only secure their future access to credit but also enable others to benefit from the program, fostering a cycle of empowerment that aligns with the government’s broader economic vision.
