Nairobi, May 15 : Kenya’s State Department for Micro, Small, and Medium Enterprises (MSMEs) data released last year showed that default rates for loans from the country’s “Hustler Fund,” a government initiative which allows citizens to access credit at cheaper rates than commercial banks, now surpass 50%, raising questions over the viability of President William Ruto’s flagship economic programme.
Government data shows that more than half of Hustler Fund borrowers had defaulted on repayments totalling KSh11billion ($85m) as of September 2024.
In the wake of concerns over the rising defaults, with more than half of the loans already disbursed falling into bad debt, the government is developing a system to track Kenyans who have defaulted on loans from the Hustler Fund.
In his manifesto prior to the last general election in 2022, Ruto pledged to launch a “Hustler Fund” in a bid to offer poorer Kenyans instant loans at affordable rates. The interest rate of Hustler Fund loans is 8% annually, calculated daily at a rate of 0.02%, in a country where some commercial entities charge more than 100% in annual rates.
