The government is on the verge of losing Sh7 billion loaned to 13 million Kenyans under the Hustler Fund Programme.
It has emerged that the Sh7 billion was not insured and the government is yet to implement a full proof recovery mechanism to ensure that the funds are not lost through non-repayment.
This came to light yesterday during a sitting of the National Assembly’s Special Funds Committee which is looking into the financial operations of the Financial Inclusion Fund (Hustler Fund) as highlighted in the Auditor General report for the Financial year 2022/2023.
Hustler Fund acting Chief Executive Officer Elizabeth Nkukuu and Micro, Small and Medium Enterprises Principal Secretary Susan Mang’eni, who appeared before the committee were questioned about the status of the funds and the impact it has made since its inception.
“What is the amount of money that has been defaulted?” Posed Nyatike MP Tom Odege.
To which Nkukuu responded: “The people who borrowed within the first and second months are holding a portfolio of Sh7 billion…but if you look at those people, they are people of means and are transacting an average of Sh21,00 per month. They are not people who cannot pay just people who do not want to pay.”
Her response however elicited further questions from the MP Mohammed Fatuma-led committee which sought to know whether the money was insured.
“Was this money insured and if so, which insurance firm took this up. If it is not insured, then what risk are we taking up as a country?” Posed Kabuchai MP Majimbo Kalasinga.
Siaya MP Christine Ombaka wanted to know how money would be recovered from those who have since passed on and whether a mechanism to track down the defaulters had been implemented.
Nkukuu admitted that the funds had not been insured but the government was working on “forceful” methods of money recovery.
“The money is not insured. We have not taken any insurance on the money and that is why we are coming up with the enforced collection mechanism. That is what we are taking through process to see, from a legal perspective, that will look like,” said the CEO.
“One of the things the government had done, was depending on the goodwill of people but now looking at the data it can no longer be the case. We are currently working on a “nagging” recovery method whereby we remind you when you are doing your transactions that you need to pay. We are also looking to see how we can get the money directly from your wallet or airtime. We are trying to see how to do it legally,” she added.
The committee also heard that an analysis by the fund management revealed that 98 per cent of the defaulters were still active on a monthly basis and the Hustler Fund CEO hopes that the money could be recovered.
“For the one who passed away, we may not be able to do anything about it,” said Nkukuu.
Busia Women Rep Catherine Omanyo said she was having a hard time understanding the need of the fund and as such called for its closure.
“This fund is a duplication of problems. I want to be convinced why it is there,” she said.
Kalasinga said: “As a committee I think we should recommend that this fund be wound up…how can we take tax payers money and not insure it…it could mean that we are just loosing this money.”
Committee Chairperson Fatuma ordered the Fund CEO to appear before the House team in two weeks’ time and table data on the defaulters.
MPs faulted Nkukuu for appearing before the committee without written submissions to queries raised by the Auditor General.
“It would be unfair to proceed in this manner. When re-appearing before us, be sure to provide personal details of the defaulters such as their names and regions they come from,” said Fatuma.
Committee Vice chair Abdul Dawood said that the details to be tabled per person, per constituency would help the committee establish whether the funds were really given out or not.
