Kenya To Borrow KSh 20b From World Bank, EU To Finance Hustler Fund

• The Hustler Fund was launched in December 2022 by President William Ruto and provides cheap credit to over 20 million citizens
• Phase two is functional after President William Ruto launched the new product targeting SMEs and chamas (women groups)
• The government intends to loan KSh 200 billion to hustlers over the next five years and hopes to secure World Bank support

President William Ruto's government has initiated talks with the World Bank for a KSh 20 billion loan to finance the Hustler Fund.

How many Kenyans borrow Hustler Fund?

The Fund was launched in December 2022 by Ruto and provides cheap credit to over 20 million citizens at the grassroots level.

According to Bloomberg, the loan will support small enterprises. The government intends to loan KSh 200 billion to hustlers over the next five years.

Co-operatives and Micro, Small and Medium Enterprises Development Cabinet Secretary (CS) Simon Chelugui said Treasury will invest KSh 10 billion in the Fund by June 2024.

The Kenya Kwanza Alliance administration was also in talks with the European Union (EU) and the US Agency for International Development to finance its flagship project.

Why Kenya should limit borrowing

Rufas Kamau, a market analyst at FX Pesa, told TUKO.co.ke that Kenya was in the red zone regarding borrowing.

He opined that Ruto understands Kenya's debt situation but cannot cut expenditure because it's bad politically.

"They (the state) understand the situation very well. We were already in heavy unsustainable debt before they took control of the government. What they are avoiding is cutting government expenditure since it is bad politically," Kamau said.

What is Hustler Fund's new product?

The Hustler Fund phase two is now functional after President William Ruto launched the new product targeting SMEs and chamas.

Ruto introduced the product during the Madaraka Day celebrations in Embu County on Thursday, June 1.

Co-operatives and MSME Principal Secretary (PS) Patrick Kilemi said over 20,000 registered groups applied for the loan.

"I encourage Kenyans to form chamas and apply for the group loan from the Hustler Fund... which is being given on a single digit interest rate," said Kilemi, as quoted by Citizen TV.

What is Hustler Fund

Ruto said the fund came as an opportunity for millions of Kenyan borrowers who were denied access to credit due to CRB blacklisting.

"We listened to Kenyans from all corners of the country. They complained about Fuliza, and Shylock issuing loans at high-interest rates. That's why we agreed to come up with this fund," Ruto said.

The president confirmed that the facility would be offered at a single interest rate of 8% per year (0.002% per day).

He noted that the Fund is 500 times cheaper than any lender in the market and requires no paperwork or collateral.

Kenyans can access the facility through a USSD code (*254#) or mobile applications such as the M-Pesa App.