The Hustler Fund, which was launched late last year and has been in operation for over two months now, has so far disbursed Kshs. 15.9 billion in loans with about half of that money (Kshs. 7.7 billion) being repaid. 18.4 million Kenyans are subscribed to the fund and 5.6 million subscribers have borrowed multiple times showing that there is a demand for the funds despite the small initial amounts lent out to subscribers. The government is now rolling out the second phase that will see limits ranging from Kshs. 100,000 to Kshs. 2.5 million. President William Ruto has promised to increase the allocations to the fund on a monthly basis so as to allow more borrowing. The second phase is targeting MSMEs so that they can grow their businesses and the Cabinet Secretary has encouraged Saccos to apply to disburse these funds.

The question about defaulters still remains though. The fund was conceived as a revolving fund and repayment is crucial to the sustainability of the fund. 800,000 borrowers have defaulted on the loans which should be paid within 14 days. Those in default after a 30-day period are no longer eligible to borrow again as this is considered a total default. They can only access the fund once they repay. Partial repayments  are not considered a default. According to the terms spelt out in the loan agreement, the Fund can dip into the savings component of a borrower’s account to recoup the defaulted amount. A defaulter also risks higher rates when borrowing in future. This however still leaves a big part of the money unpaid and the government is said to be contemplating using debt collectors.

Defaulting is common in government-backed schemes such as the Uwezo Fund which is owed Kshs. 4.64 billion but has no ledgers showing who the defaulters are. The Fund also lacks information on loan recoveries made over the years.

Hustler Fund defaulters on the other hand are easy to track and those who repay are also able to access their savings earlier than those who pay on time. Upon repayment of their loan, they can immediately withdraw their savings. However, those who pay on a timely basis are only able to access their savings after a period of 1 year and at the same time access higher limits.