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The government is planning to raid M-Pesa accounts of
Kenyans who have defaulted in repaying Sh7 billion to the Hustler Fund.
The deductions would also be executed when the
defaulters load airtime to their phones in an effort by the government to keep
the fund afloat.
So far 13 million Kenyans have borrowed the billions
from the fund and have refused to pay it back.
Financial Inclusion Fund (Hustler Fund) acting CEO
Elizabeth Nkukuu told MPs that they have reached a dead-end in the recovery
bid.
She said most of the defaulters took the loan in the
first two months of launch and are yet to repay.
“They are mostly people who borrowed in the first and
second months and the default amount is about Sh7 billion,” Nkukuu told MPs.
She was before the National Assembly’s Special Funds
Account Committee chaired by Migori Woman representative Fatuma Mohammed.
“What we are looking at is to get money from their
MPesa or airtime, we are in the process of considering appropriate legal
provisions," Nkukuu said.
According to Hustler Fund boss, most of the defaulters
are people of means, given their mobile money transaction history.
“The beauty of this Fund is that we have the phone
numbers and the unique identifiers of the defaulters, the national ID. They are
people of means, they are people who just don’t want to repay,” she said.
Nkukuu said the fund is currently nagging defaulters
with constant reminders every time they make transactions.
That too, she noted, is not working.
According to Nkukuu, a review of the mobile
transactions of the 13 million defaulters, the majority of them transact an average
of Sh21,000 every month.
MPs also questioned how the fund is dispensing
billions to Kenyans yet the monies are not insured.
The lawmakers want the fund to be wound up over the
insurance hitch and for lack of adequate staff to manage the billions.
MP Majimbo Kalasinga (Kabuchai) and Rahim Dawood
(North Imenti) pointed at the grey areas that may occasion loss of billions of
taxpayers’ money.
“Can we know if the money was insured and which
insurance company? We can recommend the Fund to be wound up, how we can give
out billions which are not insured?” posed Kalasinga.
“This fund is not working,” added Dawood.
Responding to Kalasinga, Nkukuu confirmed that the
billions so far given out are not insured.
“The money is not insured that is why we are resorting
to forceful recovery,” she told the committee.
The committee chair directed the officials to furnish
the panel will all the details of the 13 million defaulters within two weeks.
The CEO was appearing before the Committee to respond
to 2022/23 audit queries on the Fund.
Hustler Fund, officially known as the Financial
Inclusion Fund, was launched by President Ruto on November 30, 2022.
A seed capital of Sh12 billion was drawn from the
exchequer to loan to “people at the bottom of the economic pyramid.”
However, the review by Auditor General Nancy Gathungu
revealed that people who are not registered could receive loans.
Ideally, only customers who have opted into the
Financial Inclusion Fund are eligible to apply and receive loans.
In the period under review, 1,304 persons who had not
registered for the fund received loans to the tune of Sh1.7 million.
Cases of duplicate loan identity numbers were also
reported, of which some numbers were used to process more than one loan.