Nairobi, May 22, 2025 — The Kenyan government is considering writing off approximately Ksh6 billion in defaulted loans disbursed under the Hustler Fund, an initiative launched in 2022 to empower low-income earners and small-scale entrepreneurs through affordable credit.
According to Susan Mang’eni, Principal Secretary in the State Department for Micro, Small, and Medium Enterprises Development, the proposed debt relief could affect over 10 million Kenyans who accessed the loans but have since defaulted due to economic hardships and limited business returns.
“We are reviewing options for restructuring or possibly forgiving a significant portion of the non-performing loans, especially those taken by the most vulnerable groups,” Mang’eni said during a recent press briefing.
The Hustler Fund, a flagship programme of President William Ruto’s administration, was introduced to provide instant, low-interest digital loans to individuals and micro-enterprises often excluded from mainstream financial services. Borrowers could access amounts ranging from Ksh500 to Ksh50,000 via mobile phones, with the intention of promoting financial inclusion and boosting grassroots entrepreneurship.
Despite its ambitious vision, the fund has faced mounting challenges. Data from the Ministry shows that nearly half of the total disbursed loans—amounting to Ksh13 billion—remain unpaid. Economic analysts cite factors such as high unemployment, inflation, and poor loan management education among borrowers as key reasons behind the default crisis.
The possible write-off is stirring mixed reactions. Supporters argue that forgiving the debt would give struggling Kenyans a second chance to rebuild their financial footing, especially amid rising living costs. Critics, however, warn that such a move could encourage future loan defaults and undermine financial discipline.
“Debt forgiveness, if not paired with improved lending criteria and borrower training, risks repeating the same cycle,” said economic analyst Dr. Lydia Ochieng.
Mang’eni assured that any decision made would be informed by data and stakeholder consultations. She also hinted at reforms in the Hustler Fund’s second phase, including credit scoring mechanisms and entrepreneurship mentorship programs to increase loan repayment rates and long-term impact.
As the government deliberates on this unprecedented financial decision, millions of Kenyans await clarity on whether their debts will be wiped clean — and what new conditions might govern future borrowing.
