MPs question control of Hustler Fund

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. [PCS]

MPs have raised concerns about the limited control that the government has over the operations of the Hustler Fund.

They noted that the State-run fund that advances micro-loans to Kenyans and small businesses is controlled by other companies and not the secretariat that was set up to manage the fund.

The National Assembly's Budget and Appropriations Committee (BAC) chaired by Samuel Atandi noted that lack of access has limited the information available on the management of the fund, which has made fast disbursement of loans and effective recovery a challenge.

This has been shown by the rising number of defaulters. "It was further noted that the Hustler Fund is currently pegged on third-party providers, which limits the state department's control and access to timely information," said the committee in a report on the budget estimates for the 2025/26 financial year.

With about 25.8 million customers who are potential business owners, students and other interested parties, the programme offers easy accessibility to the funds.

Recent statistics show that Sh65 billion has been borrowed by different Kenyans, with the statistics showing that only Sh53 billion has been repaid, leaving Sh12 billion outstanding and Sh6 billion as non-performing loan.

"We have a product that needs nothing, it just needs a citizen, his phone and they can borrow as much as they can," said President William Ruto during the Hustler Fund launch in 2022. "Today we are resting the collateral system that is built on credit rating," he said.

His speech triggered many Kenyans, with his bottom-up campaign, to take up loans for several purposes, bringing about a high loaning rate. There is a need for a detailed report covering customer data, loan performance and recovery strategies.

Recently, the government proposed to increase fund allocations from Sh1 billion to Sh5 billion, which was rejected by the parliament, citing a poor recovery strategy.