Hustler Fund gets additional Sh300 million even as defaulters vanish with billions

The government has boosted funding to the Hustler Fund even as it battles to recover billions of shillings from defaulting borrowers.

In the 2025/26 financial year, Treasury Cabinet Secretary John Mbadi has proposed an additional Sh300 million allocation to the Financial Inclusion Fund, commonly known as the Hustler Fund, bringing new hope to households and Micro, Small, and Medium Enterprises (MSMEs) seeking affordable credit.

“The government recognises the challenge of accessing affordable credit by most Micro, Small and Medium Enterprises (MSMEs) and Kenyans at the bottom of the pyramid. To address this challenge, the government is enhancing access to finance by increasing support for key interventions,” Mbadi said during the budget presentation on Thursday.

Under the same financial year, the government has also allocated Sh300 million to the Youth Enterprise Development Fund, Sh600 million to the Centre for Entrepreneurship Project, and Sh1.3 billion to the Rural Kenya Financial Inclusion Facility. Additionally, Sh200 million has been set aside for MSME Agricultural Credit.

However, the increased support comes at a time when the government is grappling with widespread loan defaults within the Hustler Fund.

Appearing before the National Assembly’s Committee on Trade, Industry and Cooperatives, MSMEs Principal Secretary Susan Auma Mang’eni disclosed that 10 million Kenyans borrowed money from the fund between November and December 2022 and never paid it back.

“About 10 million Kenyans borrowed about Sh500 (each) in November and end of December 2022 and never repaid. We are tracing them, and if we cannot recover the money, we will be considering a write-off of about Sh6 billion for individuals who borrowed and vanished. But we are not at the write-off stage at this moment because we are pursuing defaulters,” Mang’eni said.

She further noted that of the 25.8 million Kenyans enrolled in the Hustler Fund since its inception in 2022, only nine million are considered “good borrowers” who have consistently repaid their loans.

The fund initially allowed individuals to borrow up to Sh50,000 for a 14-day period, charged at an annual interest rate of eight per cent. Loan terms have since improved for consistent and repeat borrowers.

In the previous 2024/25 financial year, the government had set aside Sh5 billion for the Hustler Fund, Sh200 million for the Youth Enterprise Development Fund, Sh162.5 million for the Centre for Entrepreneurship Project, and Sh1.9 billion for the Rural Kenya Financial Inclusion Facility. These allocations brought the total support for MSME-targeted interventions to about Sh7 billion.

Beyond credit access, the state also committed to supporting livestock farming as part of efforts to strengthen the MSME value chain and boost income generation in underserved areas.

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