June 2, 2023: Ruto’s Kenya Kwanza government ran its campaign with the promise of a transformative economic model – the “bottom-up” approach. This led to the birth of the Hustler Fund that has set aside Sh50 billion to provide cheap credit to micro and small enterprises. It will give the beneficiaries access to financing at an eight per cent pro-rated basis or a daily rate of 0.002 per cent.
For starters, let us focus on the local transport sector dominated by over 1.2 million boda-boda riders. According to a study by Car and General, each boda boda rider makes an average of Sh1,000 per day from an average of 15 rides, translating to a daily income of Sh1 billion or Sh365 billion every year. Over the years, boda-boda riders have lacked access to proper financial services and have ended up being duped by unscrupulous people under the guise of investing their money.
The sector has a great opportunity to benefit from the hustler fund via the e-wallet feature which is part of the e-driving licence being rolled out by the Kenya Government.
However, the “Hustler Fund,” touted as a lifeline for MSMEs, is facing its own set of challenges. Despite the availability of loans, there is a significant default rate of 29%, which is higher than the one reported by local commercial banks (15.4 per cent).
Analysts argue that the Hustler Fund has the capability to change the business environment for small-scale businesses but is not living up to its intended purpose.
February 18th 2024: Government to Enhance Hustler Fund to Provide Additional Loan Categories for Mama Mbogas and Boda Riders
