Ruto appoints Habil Olaka new chairperson of Hustler Fund advisory board
The main aim of the Hustler Fund is to help those in the informal sector transition to the formal financial system, a crucial step for long-term economic empowerment.
President William Ruto has appointed Habil Olaka as the new non-executive chairperson of the advisory board of the Financial Inclusion Fund, popularly referred to as Hustler Fund.
Olaka, who served as the CEO of the Kenya Bankers Association (KBA) until his retirement in March 2024, will hold the position for a three-year term, starting from February 21, 2025, as indicated in the gazette notice announcing his appointment.
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Along with this appointment, President Ruto revoked the appointment of Irene Muthoni Metha Karimi, who had held the same position since January 2023, when the Hustler Fund was launched.
Muthoni was initially set to serve a three-year term.
Olaka's leadership at the Kenya Bankers Association made him a key figure in the country's banking sector. The KBA had announced his retirement in March 2024 after serving for 14 years.
The Hustler Fund, which was launched in December 2022, is a critical part of President Ruto's initiative to assist Kenyans in escaping poverty.
The fund offers loans ranging from Sh500 to Sh50,000 through mobile phones and includes a savings component aimed at supporting individuals in the informal sector, many of whom lack access to traditional banking services.
Loan repayment
Despite initial concerns over loan repayment, which included reports of widespread defaults, the Principal Secretary for MSMEs Development Susan Mang'eni reassured the public that the repayment rate is at an encouraging 80 percent.
"We are not seeing the level of defaults that were initially feared. The repayment rate is at 80 per cent, which is encouraging," she said.
The government also addressed worries about the fund's financial stability.
Although disbursements had decreased from Sh12 billion in the previous fiscal year to Sh800 million, Mang'eni confirmed that Sh2 billion had been released from the exchequer to support the programme.
Lower interest rate
The main aim of the Hustler Fund is to help those in the informal sector transition to the formal financial system, a crucial step for long-term economic empowerment.
One of the key advantages of the Hustler Fund is its lower interest rate. While commercial banks typically charge higher rates, the fund charges a modest 8.0 per cent annually. Loans are repaid within 14 days, with an option for a 30-day extension.
The fund also features a unique savings and pension component. Borrowers must contribute a portion of the loan to both short-term savings (30 per cent) and pension remittance (70 per cent). The government matches these contributions, up to a maximum of Sh3,000 annually.
While defaulters are not blacklisted, the government has introduced a new credit scoring system to track responsible borrowers.
This system will enable individuals who demonstrate creditworthiness to graduate to larger loans offered by commercial banks, thereby supporting their business growth.
"We will continue to engage with commercial banks to ensure that these borrowers can seamlessly graduate into accessing larger loans," PS Mang'eni said.
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