President William Ruto has called on the Ministry of Cooperatives and Medium, Small, and Micro Enterprises (MSMEs) to explore integrating asset financing into the existing Hustler Fund. The objective is to enable entrepreneurs to acquire capital-intensive assets seamlessly through this government-backed financial technology (fintech) initiative.
In his State of The Nation Address, President Ruto underscored the positive impact of the Hustler Fund, citing its success in meeting the substantial demand for affordable credit. He emphasized the platform’s ability to demonstrate Kenyans’ eagerness to embrace credit and savings, showcasing a commendable track record of timely loan repayment with minimal prompting.
President Ruto rejected the notion that Kenyans are deemed not creditworthy or high-risk, branding it as unjust financial profiling perpetuating an unnecessary self-fulfilling prophecy. The President’s directive signifies a commitment to challenging such stereotypes and promoting financial inclusivity.
Since its official launch on November 30th of the preceding year, the Fund, officially known as the Financial Inclusion Fund, has disbursed a significant sum, reaching KES 36.6 billion by the end of October 2023. Additionally, the platform has accumulated savings of KES 2.3 billion, underscoring the popularity and effectiveness of the initiative.
Key statistics from the platform include; 7.5 million repeat borrowers, an impressive overall repayment rate of 73 percent with 50,000 groups formed under the Group product, with 20,000 accessing KES 151 million.
Despite these successes, a notable challenge arises with the treasury signaling a substantial reduction in the budget allocated to the Hustler Fund, nearly halving it to KES 5 billion. This significant decrease follows the initial allocation of KES 10 billion set aside by Treasury Cabinet Secretary Njuguna Ndung’u in the June budget for the fiscal year 2023/24.
The budget cut raises concerns about the potential impact on the Fund’s ability to sustain and expand its operations, given the impressive demand and positive outcomes it has generated in a relatively short period.
President Ruto’s directive to explore asset financing integration into the Hustler Fund reflects a proactive approach to enhance the platform’s capabilities and address the diverse needs of entrepreneurs. However, the budget cuts pose a challenge to the Fund’s momentum, underscoring the importance of finding a balance between fiscal responsibility and sustaining a successful initiative that addresses the financial needs of Kenyan entrepreneurs.
As the government navigates these financial intricacies, the evolution of the Hustler Fund will undoubtedly continue to be closely monitored by stakeholders and the public alike.
