The Hustler Fund, Kenya’s government-backed digital credit facility under the Ministry of Cooperatives and MSMEs, has disbursed billions in low-interest loans to over 20 million Kenyans since its launch in 2022.
However, with default rates exceeding 50% totalling over KSh 11 billion in unpaid loans as of mid-2024 the program has tightened eligibility to promote repayment discipline.
If you’ve defaulted on a Hustler Fund loan, the short answer is no, you cannot access new credit from the Hustler Fund (including Personal or Bridge Loans) until you fully repay the outstanding balance.
This restriction also extends to other government programmes and private lenders, creating broader financial barriers.
This policy aligns with the fund’s goal of encouraging responsible borrowing while supporting economic inclusion.
Below, I’ll break down the rules, consequences, and clear, actionable steps to resolve your default and regain access.
Key Rules on Defaults and New Credit Access
Hustler Fund-Specific Restrictions:
Per official guidelines, any outstanding loan whether Personal (up to KSh 50,000 at 8% interest) or Bridge (enhanced limits for reliable borrowers at 8-9.5% interest), blocks new disbursements.
You must clear the full amount, including accrued interest (an additional 1.5% per annum on Bridge Loan defaults after 30 days), to restore eligibility.
Repeat borrowers need a “good repayment history” and a Hustler rating of A (highest) or B (moderate) to qualify for higher limits or Bridge Loans; a default typically drops you to C (lowest), requiring habit improvement.
No Partial Forgiveness:
Unlike some microfinance programmes, there’s no automatic restructuring or debt waiver. However, the government has floated “financial amnesty” for willing repayers in tied programmes like SHA (Social Health Authority) Lipa Ule Pole Pole, where defaulters can settle to unlock benefits.
Broader Impacts:
Defaults are now shared with the Credit Reference Bureau (CRB), barring you from bank, Sacco, and digital credit for up to five years.
You’re also ineligible for youth grants like the KSh 50,000 NYOTA program (affecting ~9 million defaulters) and other MSME supports.
This blacklist aims to deter non-repayment but has sparked criticism for trapping low-income borrowers in debt cycles.
High defaults stem from factors like low borrowing limits (often under KSh 1,000), misuse for consumption (e.g., alcohol, per user anecdotes), and economic pressures.
Once cleared, your limit can grow based on timely repayments up to KSh 50,000 for Personal Loans.
READ ALSO:How to View, Increase, or Restore Your Hustler Fund Limit
Practical Steps to Clear Your Default and Access New Credit
Repayment is straightforward via M-PESA-linked channels, and full settlement can unlock access within days. Here’s a step-by-step guide:
- Check Your Outstanding Balance and Status:
- Dial *254# on your registered Safaricom line (the fund is M-PESA exclusive).
- Select “Check Loan Balance” or “My Loans” to view the principal, interest, and due date.
- Alternatively, download the Hustler Fund mini-app via the M-PESA app (under “Loans and Savings”) and log in with your ID and phone number.
- Note: Loans are tied to your ID and SIM; if you’ve changed numbers, visit a Safaricom agent for transfer (similar to M-Shwari).
- Repay the Full Amount:
- Use USSD: Dial *254# > “Repay Loan” > “Pay for Self” > Enter full amount (or partial if needed, but full is required to clear) > Confirm with M-PESA PIN. Cents are supported.
- Via App: Open the mini-app > “Repay” > Select full/partial > Pay via M-PESA.
- For Others: If helping someone else, use “Pay for Other” > Add their number/ID > Amount > PIN (even if they’re unregistered).
- Tip: If low on funds, partial payments reduce interest accrual. Fuliza overdraft integration is in development for easier top-ups.
- Cost: No extra fees beyond interest; repayments deduct directly from your M-PESA.
- Confirm Clearance and Reapply:
- After payment, recheck balance via *254# or the app; it should show zero outstanding.
- Wait 24-48 hours for a system update, then dial *254# > “Borrow” or app equivalent to request a new Personal Loan (95% disbursed, 5% auto-saved).
- For Bridge Loans: Ensure A/B rating (built via consistent history); if not, start with small Personal Loans to rebuild.
- If issues persist (e.g., delayed update), contact support: Call 0800 700 700 (toll-free) or email support@hustlerfund.go.ke. Users report quick resolutions for repayment disputes.
- Rebuild Your Credit Profile:
- Make timely repayments on new loans to boost your rating and limit (reviewed monthly).
- Avoid CRB escalation: Defaults over 30 days freeze your account; clear early to prevent bank blacklisting.
- Explore tied incentives: Settle for SHA amnesty access or NYOTA eligibility checks via Huduma Centres.
- Seek Support if Struggling:
- Visit a Huduma Centre for free financial counselling or dispute resolution.
- Join community groups (e.g., Facebook’s Hustler Fund forums) for peer tips.
- For hardship: Petition your MCA or MP; some counties offer micro-grants to offset defaults.
Final Thoughts
Defaulting on the Hustler Fund isn’t a dead end, as repaying unlocks not just new credit but also economic mobility in a system designed for hustlers.
With 15+ million active users and KSh 7+ billion in monthly disbursements, the fund works when used wisely (e.g., for business stock, not emergencies).
If you’re a defaulter, act now: Every shilling repaid strengthens Kenya’s bottom-up economy. For personalised advice, start with *254# today. If this doesn’t resolve your query, provide more details for tailored guidance.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, and digital finance at Africa Digest News.
