Auditor-General Nancy Gathungu has raised a red flag over the government’s move to write off Ksh6 billion loans taken by Kenyans from the Hustler fund.

Appearing before the Budget and Appropriations Committee (BAC), which is receiving submissions relating to the 2025/2026 budget estimates, Gathungu questioned whether the government has established that the individuals who took the loans are unable to pay them before waiving them.

“If you are claiming that Ksh6 billion has not been accounted for, various questions emerge. Do you have the list of the individuals and the amount advanced to them? Are you able to prove that the individuals are untraceable or unable to pay, and therefore, the amount is unrecoverable? I think that is where we should start,” Gathungu told the MPs.

Her sentiments came after Micro Small and Medium Enterprises (MSME) Development PS Susan Mang’eni told MPs that the government is contemplating writing off Ksh6 billion loans taken by Kenyans as the borrowers had disappeared.

Mang’eni told MPs that Kenyans borrowed the funds either once or twice in November and December 2022, when the fund was formed.

She, however, said that out of the Ksh65.5 billion loans taken, about Ksh53.8 billion has so far been repaid, with the remaining either being defaulted on or borrowers increasing the repayment period.

“The repayment rate of personal loans is 80 per cent. But we had about 10 million Kenyans who borrowed as low as Ksh500 either once or twice at the beginning of 2022, and they did not pay. The money at risk is about Ksh6 billion,” the PS said.

Despite the failure to recover the Hustler Fund amounts, the State Department had sought an additional Ksh5 billion towards the kitty in the 2025/26 financial year.

Baringo County Woman Representative Florence Jematiah said she was not surprised by the proposal to allocate more money to the Hustler Fund kitty.

“Kenyans were lent money but have since defaulted, and here we are, we want to allocate more money,” she said.

No more

The Trade, Industry and Cooperatives Committee, chaired by Ikolomani MP Bernard Shinali, who had appeared to defend the State Department’s budget, revealed that the committee made a resolution to retain the amount as contained in the estimates by Ksh1 billion.

“We made the decision because of their failure to recover the Ksh6 billion in loan amounts to the Hustlers. They should recover the amount first before seeking more,” he said.

The Hustler Fund was launched on November 30, 2022, by President Ruto to allow Kenyans at the bottom of the pyramid to borrow loans at a minimum of Ksh500 and a maximum of Ksh50,000 for 14 days at an interest rate of eight per cent per year.

The Fund, which is one of President William Ruto’s pet projects, is meant to provide Kenyans at the bottom of the economic pyramid, including youth and women, access to financial services such as credit, savings, insurance and investment products for the unserved and underserved population.