The Treasury has allocated Sh5 billion to the Hustler Fund, in the financial year 2024/25.
The Treasury has allocated Sh5 billion to the Financial Inclusion Fund, popularly known as the Hustler Fund, in the financial year 2024/25.
The fund, which is managed by the Cooperatives department, will go to providing cheap mobile phone loans to millions of Kenyans.
A similar amount was allocated to the Fund in the dying financial year.
The Treasury had allocated Sh10 billion in the original 2023/24 budget but it was trimmed in the first supplementary budget.
Hustler Fund is a pet subject of President William Ruto since it marked his key message during the campaign for votes in the 2022 elections.
The Fund has been issuing loans of between Sh500 and Sh50,000 to individuals for a tenure of 14 days at an interest rate of eight percent per annum.
President Ruto in March last year also launched the Fund’s microloan product that gives loans of between Sh10,000 and Sh200,000 to businesses.
The product lends to individual business owners as well as business groups at an annual interest rate of seven percent with repayment schedules of one, three, six and nine months to one year. In the run-up to the 2022 elections, Dr Ruto promised to allocate Sh50 billion annually to the kitty.
A major challenge that has faced the Fund, which Dr Ruto launched in November 2022, is the high default rate, which threatens its sustainability. According to Treasury, the Fund had a default rate of 27 percent last year.
It had disbursed Sh36.6 billion by October 2023, but only 73 percent of the loans had been repaid.
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