Hustler Fund at Two: Achievements, Setbacks, and the Road Ahead

President William Ruto, accompanied by Cabinet Secretary Wycliffe Oparanya and Principal Secretary for the State Department of Cooperatives, Micro, Small, and Medium Enterprises Susan Mangeni, during the second anniversary celebrations of the Hustler Fund at KICC, Nairobi, on December 9, 2024.

The Hustler Fund, launched two years ago to support Kenya’s informal economy, has achieved significant milestones while confronting several challenges.

With over Ksh 60 billion disbursed to 24.7 million beneficiaries, the initiative aims to deepen financial inclusion and stimulate economic transformation.

President William Ruto, speaking at the second-anniversary celebrations at the Kenyatta International Convention Centre (KICC) on December 9, 2024, introduced new measures to enhance accessibility and promote financial discipline.

Among these is the Bridge Loan product, which offers better terms to borrowers with good credit behaviour.

The loan tenures have been extended to 30 days, with interest rates starting at 8% per annum, allowing borrowers to gradually increase their credit limits.

This product, according to Ruto, is designed as a stepping stone to greater financial opportunities within the Hustler Fund platform and beyond.

“The Hustler Fund is not an end; it is a means to an end—a pathway to better jobs, better businesses, and better futures,” Ruto said, emphasizing the fund’s role in economic empowerment.

Empowering the UnderservedThe Hustler Fund has made strides in providing previously underserved Kenyans with access to financial resources, helping to establish credit profiles for millions excluded from formal financial systems.

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Susan Mangeni, Principal Secretary for the State Department of Micro, Small, and Medium Enterprises (MSMEs), noted the significance of the behavioural credit rating system introduced to the fund.

Beneficiaries are scored on a scale from A1 (Excellent) to C3 (Poor), which eliminates the need for traditional collateral and prepares borrowers to transition into mainstream financial services.

President William Ruto addresses a town hall meeting on the transformation of the Hustler Fund during its second-anniversary celebrations at KICC, Nairobi, on December 9, 2024.

This system has allowed those with strong repayment records to access higher loan limits and more structured financial products.

Approximately 2 million borrowers are expected to graduate to expanded financial opportunities, including partnerships with banks and capacity-building programs.

Mangeni highlighted the success of the Fund in integrating these borrowers into the broader financial ecosystem, allowing them access to services traditionally unavailable to those without formal credit histories.

Cultivating Savings and Financial Discipline

A key component of the Hustler Fund is its mandatory savings component, which has mobilized Ksh 3.3 billion in borrower savings.

These savings are intended to serve as a buffer against economic shocks and to help participants achieve long-term financial goals, such as retirement savings and health financing.

This mechanism has been praised for fostering a culture of financial discipline among borrowers, encouraging them to prepare for future economic challenges.

“This mechanism instills a culture of responsibility, helping borrowers prepare for future opportunities and challenges,” Mangeni noted.

Addressing Challenges and ImpactDespite its success, the Fund faces several challenges. Around 27% of borrowers remain in default, categorized within lower-tier credit groups.

Mangeni expressed optimism that these individuals can still improve their scores through structured repayment plans.

The Fund’s impact, however, extends beyond individual borrowers. Over 200,000 women have received training in business skills and financial literacy, and 30,000 new businesses have emerged, contributing to local economic development.

“We’ve created a pipeline for MSMEs to gain visibility and access broader opportunities, from capacity building to markets and investment spaces,” Mangeni said.

Future ProspectsLooking forward, the government plans to launch the Kenya National Entrepreneur Savings Trust (KNEST), a long-term savings management system aimed at enhancing economic security for borrowers.

Ruto reiterated his administration’s commitment to financial inclusion, emphasizing the need to prepare Kenyans for a transition into formal financial systems to ensure sustainable economic growth.

“This initiative will provide a structured pathway for individuals to accumulate savings, thereby enhancing their resilience and security,” said Ruto.

A Model for Global Informal EconomiesAs the Hustler Fund marks its third year, it continues to serve as a model for addressing challenges in informal economies.

Its innovative approach to credit history development, savings cultivation, and financial integration demonstrates a pathway to uplift millions at the bottom of the economic pyramid.

The introduction of the Bridge Loan product and behavioural credit rating system has redefined financial inclusion, empowering a new generation of Kenyan entrepreneurs.