The government has reaffirmed its commitment to its objective of deepening financial and credit inclusion among the most vulnerable segments of the economy through enhancement of the Financial Inclusion Fund popularly known as the Hustler Fund.
In a statement, Medium, Small and Micro Enterprises (MSMEs) Principal Secretary Susan Mang’eni highlighted that the government will continue to develop innovative financial products to address credit market failures and unlock access to affordable credit.
“We want to assure Kenyans that the Fund remains committed to its objective and purpose of deepening financial and credit inclusion among the most vulnerable segments of the economy.” PS Mang’eni assured, adding that “We will continue to develop innovative financial products to address credit market failures and unlock access to affordable credit.”
The PS noted that the Hustler Fund was launched on 30th November 2022, with the mandate to innovate, develop, and deploy financial services and products that are affordable, accessible, and suitable for unserved and underserved individuals at the bottom of the pyramid, including credit, savings, insurance, and investment products.
She said, the initial capitalisation of the Fund was Ksh. 20.2 billion, with Ksh. 12 billion allocated towards lending and Ksh. 8 billion as counterpart funding to match the long-term (pension) savings for the Hustler Fund beneficiaries, as envisaged in the Public Finance Management (Financial Inclusion Fund) Regulations 2022, article 7 (1) (f). Ksh. 200 million was an allocation to support the operationalisation of the Fund.
She clarified that Ksh. 8 billion allocated for matching savings was not drawn down from the National Treasury as reported by a section of the media.
“Contrary to reports appearing in some media, the Ksh. 8 billion in question, which had been allocated as counterpart funding to match the long-term savings of the Hustler Fund, was NOT drawn down from the National Treasury.” She clarified.
Adding that by 30th June 2023, the period under audit review, the Fund was 7 months old, and the matching savings product was still being developed. It would have been imprudent for the Fund to draw down the money only to idle in the commercial banks.
“We finally finalised the development of the savings product, and we undertook the first matching up during the 1st Anniversary of the Fund on 30th November 2023.” She noted. “We note that the Parliamentary Public Accounts Committee has given us two weeks to provide additional information. We assure the public that we will provide the requested documentation.”
Meanwhile, the Hustler Fund continues to positively impact the lives of many Kenyans, as intended, a total of Ksh. 71 billion has so far been disbursed to over 26 million Kenyans in both personal, group and bridge loan products. We have mobilised close to Ksh 4.8 billion in savings, both voluntary and mandatory savings.
The Hustler Fund experience has established credit visibility of all its beneficiaries, which has since been crystallised in a Hustler Fund behavioural credit rating system, a nine-band ranging from A-C (A1, A2, A3, B1, B2, B3, C1, C2, C3).
Already, over 4.5 million beneficiaries out of the 9 million repeat customers are scoring within A and B grades, demonstrating good creditworthiness.
The bridge product launched last year during the Hustler Fund’s second anniversary is graduating to a 30-day term loan and higher loan limits for good borrowers of the Hustler Fund.
The bridge customers have the opportunity to establish a banking relationship and gain banking experience, facilitating their integration into mainstream Financial Institutions for enhanced access to credit for business financing.
