The National Assembly’s Special Funds and Accounts Committee yesterday issued a directive to the Cooperatives Ministry, demanding a comprehensive list of individuals who have defaulted on their Hustler Fund loans.
This move comes amidst growing concerns over the fund’s high default rate and management practices.
During a committee session on Tuesday, Cooperatives Principal Secretary Susan Mang’eni was instructed to provide a detailed report containing defaulters’ names, outstanding amounts, and contact information, categorized by constituency.
The committee, led by Migori Town MP Fatuma Zainab, emphasized that this information would be crucial in verifying the accuracy of borrower details provided during registration.
The urgency of this directive was highlighted by the revelation that the Hustler Fund, which recently received an allocation exceeding KSh13 billion, is grappling with a staggering 78% default rate. This alarming statistic has prompted lawmakers to scrutinize the fund’s operations more closely.
Further complicating matters, the committee expressed strong disapproval of the Ministry’s failure to submit evidence related to 19 outstanding audit queries for the 2022/2023 fiscal year.
Ministry officials attributed this lapse to internal communication issues and previous staffing shortages, citing reliance on guidance from the Auditor General’s office as a mitigating factor.
The committee’s concerns extended to the fund’s operational capacity, with members questioning the ability of an understaffed entity to effectively manage billions in disbursements.
Mbooni MP Kivasu Nzioka pointedly asked, “How can a fund have Ksh13 billion to disburse but lack crucial personnel to track it?”
Adding to the fund’s challenges, it was revealed that the Hustler Fund lacks insurance coverage, raising further questions about the Ministry’s strategy for recovering funds that have become bad debt.
This parliamentary inquiry follows closely on the heels of Cooperatives Cabinet Secretary Wycliffe Oparanya’s recent announcement regarding the government’s plans to track down loan defaulters.
Speaking at the Kenya Private Sector Alliance (KEPSEA) annual conference in August, Oparanya disclosed that an overwhelming 19 million out of 21 million Kenyan borrowers had defaulted on their Hustler Fund loans.
Oparanya emphasized the public nature of the Hustler Fund, stressing the importance of loan repayment to ensure the program’s sustainability and accessibility to new applicants.
He warned of impending measures to locate defaulters, stating, “We are coming up with a system that will now track you to know where you are. You will soon see someone knocking on your door telling you to pay back the hustler fund.”
As the government intensifies efforts to address the high default rates and improve the fund’s management, the outcome of this parliamentary directive could have significant implications for the future of the Hustler Fund program and its beneficiaries.
