Chris Diaz

For years on end, small business people have required short-term credit to finance their businesses’ working capital and meet other day to day expenses.

From mama mbogas to kiosk owners and even sellers of second hand goods such as clothes/mitumba, the need for short-term credit has been a daily demand for many would be small business owners or hustlers.

Nevertheless, traditional financing avenues such as bank credit has not been easily and affordable, accessible in most part for this kind of lenders.

This is as formal credit has required rigorous process including intense credit rating processes and in some cases collateral is an obligation.

The bureaucratic credit terms has therefore seen many small business owners, certain start up entrepreneurs, locked out of the formal credit market.

In turn, such hustlers have been forced to settle for more strenuous credit sources including predatory digital lenders and shylocks with the facilities attracting high interest rates , sometimes, of up to 10 per cent a day.

The facilities while making credit accessible have been a burden to business and wannabe business persons across the breath of the country and region.

Affordable  credit

First opined as a campaign promise by the now Kenya Kwanza administration, the Hustler Fund has sort to address the challenge of credit access to micro, small and medium enterprises (SMEs).

Inside 100 days since taking over, the new government has fast-tracked the campaign promise into the now Hustler Fund actualizing the dream of affordable credit for small entrepreneurs.

As Kenyans marked the 59th anniversary of becoming a Republic this week, the Hustler Fund has this far disbursed loan worth Ksh.7.5 billion shillings in 12 days since the launch of the fund with an estimated 15.4 million Kenyans opting into the fund.

Additionally, the fund’s savings element has accrued savings of nearly Ksh.400 million while repayments to the Fund stand at over Ksh.1.2 billion.

The Hustler Fund has leveraged the power of technology to disseminate credit to businesses with reduced intermediation.

With the mobile/SIM penetration rate at over 100 per cent, the government has for the first time unlocked credit for all with Hustler loans accessible via USSD codes and mobile application platforms provided by telecommunication/network providers.

This to mark a key step towards financial inclusion for all Kenyans with an estimated 17 per cent of Kenyans yet to be financially included as per the latest data provided by the 2021 FinAcess report by the Central Bank of Kenya (CBK) & FSD Africa.

At a cost of 0.002 per cent a day or a pro-rated interest rate of eight percent per year, the Hustler Fund has been one of the cheapest competitive credit facilities available in the country.

Credit scoring

Despite attempts to revolutionize the credit information sharing (CIS) mechanism, credit scores before the Hustler Fund have been largely a black and white issue with loan defaulters getting the boot off formal credit through blacklisting.

Over 14 million Kenyans mostly sole proprietors of small business have found themselves on the wrong end of the score line as Credit Reference Bureaus (CRBs) remain mostly a naughty list for bad borrowers.

The Hustler Fund is now seeking to change this narrative by activating credit scoring where good borrowers are graduated into a higher loan/credit limit.

Credit facilities off the Hustler Fund are now set to be the true test of credit and risk-based pricing for the financial industry with the government as the pioneers.

Good borrowers, those proving they can repay their loans on time will have the chance to borrow again from the fund and have access to higher loan limits.

The Hustler Fund is on course to spearhead the revolution of credit scoring in Kenya allowing prudent borrowers to enjoy below market interest rates on loan facilities.


Traditional financiers such as banks and micro-lenders are angling to take lessons from the Hustler Fund and apply them to expand their loan books to cover SMEs.

In most parts, banks are seeking to technically inherit new borrowers from the Hustler Fund by cherry picking from the pool of prudent borrowers who have proven their ability to make payments on loans.

In essence, the Hustler Fund is working as a de-risking strategy for legacy financiers with banks seeking to apply key lessons to improve credit disbursements on their part.

Some of the lenders have already detailed the anticipated windfall from the Hustler Fund. Equity Group which presents the region’s largest bank by asset base has for instance mulled establishing a Ksh.250 billion revolving fund which will lend funds to borrowers successfully on boarded to the Hustler Fund.

For the NCBA Group, the Hustler Fund will popularize digital credit disbursements, providing impetus for its own digital loan products in Fuliza and M-Shwari.

To better scale gains from the fund, financiers ought to also consider offering training to small business owners with the view of further de-risking borrowers.

In giving credit where it’s due, the Hustler Fund has been just what the doctor ordered with the seemingly modest allocation of Ksh.50 billion to the kitty unlocking large sized changes to credit and finance in the country.

Much more actions and partnerships,  will be triggered positively after this launch to grow the economy and a collective private sector support to the youth entrepreneurship and new much needed   employment opportunities and  development. 

Traditional financiers should take the gesture and clean up their act in kind ensuring that credit is not only accessible but also affordable especially to small business owners who provide more than three-quarters of all jobs in the country.

Private sector and the Hustler Fund

The private sector can play a huge role in helping Kenyans make good use of the support they are getting from the government - the Hustler Fund. 

The private sector like Bidco Africa and EABL  among others, can make them be distributors of their products and services, as one way of utilizing the funds well and grow business abd the econony , in structured partnerships .

The agribusiness sector can train and make Kenyans stronger agriculture based  entrepreneurs,  accessing the Hustler Fund invest in farm raw materials such  products such as sunflower, soya and maize for millers, manufacturers etc .

The youth accessing the funds can also form groups to be the logistics and  transporters of products from warehouse of manufacturers to markets. This way, they will be putting the funds into good use that can earn them more and support to grow small and medium industries and dole proprietors.

The private sector can also play a huge role in training people on how well to invest or make

 good use of the funds from the government and financial institutions .

The inclusivity of international private sector and Africa leaders including the success by President His Excellency , Ruto leadership will see,  in more investors to Kenya and firm  progress and economic development that should create more jobs, competitive economy and growth of business. We all need to team together to benefit the economy as we all,  look forward to a stronger better business in 2023.

Chris Diaz, Bidco Africa Group Director 

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