The government has dismissed a report by the Kenya Human Rights Commission claiming the failure of the Hustler Fund terming it ‘politically driven, misleading and factually flawed.
Speaking at a press briefing Monday afternoon, the Ministry of Cooperatives and Micro, Small and Medium Enterprises Development Cabinet Secretary Wycliffe Oparanya, noted that the report which evaluates the Fund’s performance during the 2022/2023 financial year, draws premature conclusions from only seven months of operations and relies on an inconclusive Auditor General’s report.
“Our attention has been drawn to a report widely published by the Kenya Human Rights Commission claiming the failure of the Hustler Fund, drawing conclusions that are politically veiled. The title of the report explicitly betrays the whole purpose of the study.” CS Oparanya noted.
Adding that: “The report assessment period is indicative of the financial year 2022/2023, when the Fund was set up and was only 7 months old by the end of the said financial year. They have also weaponised the report by the Auditor General of the said financial year, when most of the issues raised in the report were not yet conclusive.”
In its report unveiled Monday morning, the Kenya Human Rights Commission sharply criticized the Hustler Fund, describing it as a politically expedient but economically disastrous initiative that has failed to deliver on its promises of financial empowerment for low-income Kenyans.
The report, “Failing the Hustlers,” concluded that the Hustler Fund is structurally unsound, economically unsustainable, and politically manipulated, and recommended that the government scrap it entirely.
Lack of engagement and false claims
Similarly, CS Oparanya faulted the KHRC for failing to engage the Ministry as well as the management of the Fund during their investigations to clarify the claims, saying the move was unprofessional.
“As the ministry in charge of the implementation of the Fund, we were never approached, and we have since confirmed from the management of the Fund that they too, were not approached to respond or give clarity to all the claims and nuances that have come out of the study. If the NGO was genuine in its pursuits, they would at the least have adhered to the professional ethical standards that govern such studies.”
Hustler Fund performance and access
Oparanya dismissed claims that government has capitalised the Fund with Kshs. 50 billion terming them false. He said the amount so far injected into the Fund is Kshs. 14 billion, which has been reinvested in a portfolio of over Kshs. 72 billion as of today.
“The dependency on the exchequer has significantly reduced as the Fund diversifies into graduation products co-created with the banks to facilitate entry into the formal financial systems by our beneficiaries with proven good hustler Fund credit behaviour.” He noted.
According to the Ministry, the Hustler Fund has so far disbursed Ksh. 72 billion since its inception with 60 billion already repaid adding that it operates digitally via *254# which can be accessed both on feature (mulika mwizi) and smartphones, offering users personal loans of upto Ksh. 50,000 and bridge loans of up to Ksh 150,000, with repayment periods of 14 to 60 days.
“The report lazily claims that we lend between Kshs 500 to Kshs 1000 when in actual sense, the personal loan product cited provides limits up to Kshs. 50,000. This was case from the onset. A properly conducted study should have brought up the true status.” Said CS “To date, Hustler Fund beneficiaries have continued growing their limits, and we have those who are borrowing up to Kshs. 150,000 on the Bridge loan product.”
The report criticized Huster Fund’s performance metrics as poor noting that by the end of 2022, the default rate stood at 68.3 pc a claim that the CS dismissed clarifying that the default rate currently stands at 20 pc.
Credit repair and financial inclusion
Oparanya said the Fund is pioneering a credit repair mechanism that has given millions of Kenyans, many negatively listed by credit bureaus after COVID-19, a second chance to access affordable loans. It has also mobilized over Ksh 5 billion in savings and introduced a behavioral credit rating system that could reshape collateral-free lending in Kenya.
While he dismissed the report as skewed, elitist and politically motivated the CS maintained that multiple independent studies, including one by the Central Bank of Kenya, have highlighted Hustler Fund’s growing role in financing the agricultural sector and deepening financial inclusion.
Also read https://www.kbc.co.ke/khrc-calls-for-disbandment-of-opaque-ksh-74b-hustler-fund/
