The government has now denied recent reports of its intention to deduct loans from mobile wallets for defaulters of the Hustler Fund, a programme designed to enhance financial inclusion for citizens.

According to the PS State Department for MSME's and Development Susan Mang'eni, the Fund operates independently from banks and mobile money services, although these entities are used to facilitate access to the funds.

The Ministry highlighted that any recovery measures undertaken would be strictly in line with Kenyan law, particularly regarding data protection.

“The default recovery measures under consideration will be in line with laws of Kenya and particularly in strict adherence to data protection laws,” the statement confirmed, aiming to assure the public that their personal information would remain protected.

The Ministry further explained that the Hustler Fund is entirely government-owned and governed by Kenyan legal frameworks.

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"The Hustler Fund clients belong to the Fund and not the intermediaries," the Ministry asserted, clarifying that while mobile and banking platforms provide the technological infrastructure, the Fund itself is distinct from traditional financial services.

With defaulters collectively owing approximately Sh7 billion, the government is considering stringent measures to recover the debts.

In addition, the Ministry has encouraged Kenyans to repay their loans on time, noting that this would help individuals improve their credit scores and qualify for larger loan amounts in the future.

Elizabeth Nkuku, the acting CEO of the Financial Inclusion Fund, provided further details during her address to the National Assembly’s Special Funds Account Committee.

She disclosed that the government is exploring options to reclaim overdue funds directly from defaulters' mobile money accounts or even through deductions from airtime purchases. "What we are looking at is to get money from their M-Pesa or airtime; we are in the process of considering appropriate legal provision," Nkuku explained.

The Ministry has also encouraged borrowers to repay their loans on time to improve their credit scores, which may lead to access to higher loan limits in the future.