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The Hustler Fund, once celebrated as a groundbreaking microcredit facility to uplift Kenya’s underserved entrepreneurs, is now under scrutiny. Approximately 10 million borrowers have failed to repay loans issued during the fund’s initial rollout, leading to a colossal Ksh.6 billion in potential losses.
Most of the defaulters borrowed small amounts, averaging around Ksh.500 each, but the collective impact has severely weakened the fund’s revolving capability. With recovery efforts largely unsuccessful, the government has hinted at writing off the entire defaulted amount—a move seen as both pragmatic and controversial.
Despite the major default crisis, the Ministry overseeing MSMEs is seeking an additional Ksh.5 billion to keep the Hustler Fund operational. Officials argue that the demand for affordable credit remains high, and more funding is necessary to sustain the initiative. However, this request comes amid budget constraints and follows a recent reduction in the fund’s allocation from Ksh.2 billion to just Ksh.1 billion in the national Budget Policy Statement. The call for more funds has raised eyebrows, especially from lawmakers concerned about pouring more public money into a program struggling with recoveries.
Parliament’s budgetary committees have responded sharply to the developments. Legislators have demanded a clear breakdown of how a revolving fund once worth over Ksh.65 billion has lost such a significant amount through defaults. Questions are being raised about the fund’s vetting mechanisms, loan recovery structures, and whether political expediency compromised financial diligence. There is growing insistence on implementing stricter eligibility checks and real-time digital tracking for future disbursements if the program is to continue receiving public funding.
At its core, the Hustler Fund was envisioned as a tool to democratize access to credit, particularly for small traders, youth, and informal sector players. However, with the high default rate, its model is now under serious threat. Critics argue that the fund may have been rolled out too quickly, without sufficient borrower education or recovery frameworks in place.
Others believe political motivations may have overshadowed the practical realities of running a sustainable microcredit program. Either way, the loss of Ksh.6 billion and the fresh demand for funding has cast doubt on whether the fund can truly deliver on its long-term promise.
With mounting pressure from Parliament and a skeptical public, the government may be forced to rethink its approach. Proposals include restructuring the fund into a public-private partnership, leveraging digital lending platforms, or transforming it into a grant-based model for ultra-low-income groups. What remains clear is that writing off Ksh.6 billion while asking for Ksh.5 billion more is a critical turning point for the Hustler Fund—and a test of political will to protect taxpayers’ money while still fostering grassroots economic empowerment.
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