Gov't clarifies hustler fund allocation amid audit queries

The government has clarified that the Financial Inclusion Fund—popularly known as the Hustler Fund—was allocated Sh20.2 billion, with a portion designated for lending and the rest set aside for asset counterpart funding.

Susan Mang’eni, the Principal Secretary for Micro, Small and Medium Enterprises Development, explained that the fund’s initial capitalization included Sh12 billion for loans and Sh8 billion for asset counterpart funding. The latter was meant to match the long-term or pension savings of Hustler Fund beneficiaries, in accordance with Public Finance Management (Financial Inclusion Fund) Regulations 2022, Article 7.

Her remarks come amid audit concerns questioning the whereabouts of Sh8 billion for the year ending June 2023.

“The Sh8 billion in question, which had been allocated as counterpart funding to match the long-term savings of the Hustler Fund, was not drawn down from the National Treasury,” Mang’eni clarified in a statement.

She added that by June 30, 2023, the Fund was only seven months old, and the matching savings product was still under development.

“It would have been imprudent for the Fund to draw down the money only to idle in the commercial banks. We finally finalised the development of the savings product, and we undertook the first matching up during the first anniversary of the Fund on November 30, 2023,” she said.

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Mang’eni also noted that the Parliamentary Public Accounts Committee (PAC) has given the ministry two weeks to provide additional documentation regarding the funds. “We assure the public that we will provide the requested documentation,” she said.

She emphasized the fund’s ongoing impact, revealing that over Sh71 billion has been disbursed to more than 26 million Kenyans through personal, group, and bridge loan products.

So far, the fund has mobilized approximately Sh4.8 billion in savings, both voluntary and mandatory.

“The Hustler Fund experience has established credit visibility of all its beneficiaries, which has since been crystallised in a Hustler Fund behavioural credit rating system, a nine-band ranging from A-C (A1, A2, A3, B1, B2, B3, C1, C2, C3). Already, over 4.5 million beneficiaries out of the 9 million repeat customers are scoring within A and B grades, demonstrating good creditworthiness,” she noted.

Mang’eni also announced that the bridge loan product introduced during the second anniversary of the Fund is now graduating into a 30-day term loan, offering higher limits to consistent borrowers.

“We want to assure Kenyans that the Fund remains committed to its objective and purpose of deepening financial and credit inclusion among the most vulnerable segments of the economy. We will continue to develop innovative financial products to address credit market failures and unlock access to affordable credit,” she added.

The Hustler Fund, launched on November 30, 2022, aims to provide affordable financial services and products—including credit, savings, insurance, and investment—especially for underserved and unserved Kenyans.