Why the Hustler Fund has scored a D

Nairobi, 

Wednesday, 15 January, 2025 

McCreadie Andias 

When Kenya’s Hustler Fund was launched in December 2022, it was heralded as a transformative tool to empower the nation’s struggling micro-entrepreneurs. 

Promised as a lifeline for boda boda riders, mama mbogas, and other small-scale traders, the fund aimed to uplift millions from poverty by providing accessible credit at affordable rates. However, two years later, the program’s impact appears to have fallen short of expectations.

The Hustler Fund was introduced as a central plank of President William Ruto’s “bottom-up” economic model, pledging to unlock opportunities for ordinary Kenyans and drive grassroots development. 

With a starting allocation of KSh 50 billion, the initiative sought to offer low-interest loans to marginalized individuals who traditionally lack access to credit.

Yet, the program’s structure has posed significant challenges. Borrowers receive loans ranging from KSh 500 to KSh 50,000, depending on their creditworthiness, but the repayment period is capped at 14 days. Critics argue that these terms are impractical for small traders, who often need longer repayment windows to reinvest and generate meaningful returns.

Initial reports showed impressive uptake, with millions registering and borrowing from the fund. However, data reveals that repayment rates are alarmingly low. According to a report by the National Treasury, as of late 2024, over 60% of loans remain unpaid. Many beneficiaries, already financially stretched, have defaulted, rendering the fund unsustainable.

A deeper issue lies in how the money is being used. The fund was envisioned as a tool to spur entrepreneurial growth, yet a significant proportion of borrowers have used it for personal expenses like food, rent, and school fees. 

This misalignment exposed the harsh economic realities facing Kenyans, where survival takes precedence over business expansion.

Another stumbling block is the limited emphasis on financial literacy. Many recipients lack the skills to manage loans effectively, leading to poor investments and defaults. 

While the government promised to pair the fund with training programs, implementation has been slow and uneven, particularly in rural areas. Without the requisite knowledge, beneficiaries struggle to maximize the fund’s potential.

The Hustler Fund’s close association with political rhetoric has also bred skepticism. Critics argue that the initiative is less about economic empowerment and more about consolidating political support. This perception has eroded trust, especially among those who feel the fund prioritizes optics over substance.

Moreover, the fund’s administration has faced accusations of inefficiency and mismanagement. Reports of opaque processes and limited oversight have raised questions about accountability, further undermining public confidence.

Kenya’s broader economic challenges compound the Hustler Fund’s struggles. High inflation, rising unemployment, and a depreciating currency have reduced purchasing power, leaving small traders with shrinking margins. In such an environment, even the most well-intentioned initiatives face an uphill battle.

Rethinking the Hustler Fund

For the Hustler Fund to succeed, it requires significant reforms. First, loan terms must be reevaluated to align with the realities of small-scale entrepreneurship. Longer repayment periods, coupled with flexible borrowing limits, would provide recipients with the breathing space to grow their businesses.

Second, financial literacy programs must be scaled up and integrated into the fund’s operations. Empowering recipients with knowledge is essential to ensure loans are utilized effectively.

Third, greater transparency and accountability are needed to restore public trust. Regular audits and clear communication on how the fund operates would address concerns about mismanagement.

Finally, the fund must be part of a broader strategy to address systemic economic challenges. Without tackling issues like inflation, taxation, and unemployment, isolated interventions will remain inadequate.