A recent audit of the Hustler Fund has unveiled shocking financial irregularities, raising concerns about the integrity of the government-backed financial inclusion initiative. The audit report for the fiscal year 2023/2024 exposed that loans totaling over Ksh. 31 million were disbursed to individuals registered as underage or, more alarmingly, unborn.
The report identified that 253,717 customers had birthdates recorded between July 1, 2024, and December 31, 2073 dates that fall in the future. Out of these, 42,981 so-called “unborn” individuals received loans amounting to Ksh. 31,135,690 through mobile service providers. Safaricom users accounted for Ksh. 24,588,216, while Airtel and Telkom users received Ksh. 6,260,874 and Ksh. 286,600, respectively.
Adding to the anomalies, 1,377 underage individuals some as young as ten days old were listed as borrowers. Of these, 1,186 had already accessed loans totaling Ksh. 681,395. Under Kenyan law, contracts entered into with minors are generally voidable, which raises the risk of unenforceable loan agreements and significant financial losses for the Hustler Fund.
Beyond these alarming disbursements, the audit revealed fundamental weaknesses in the operational framework of the Hustler Fund. The fund’s reliance on mobile service providers for loan disbursement, repayment, and record management was heavily criticized.
“The Fund does not have control over loan management, including disbursements, repayments, withdrawal of savings, and maintenance of records of outstanding loans,” the report stated. “This reliance on external service providers exposes the Fund to operational, financial, and data integrity risks.”
Established in November 2022, the Hustler Fund was designed to provide accessible financing for entrepreneurs. Loans are available via USSD code *254# and mobile application platforms with no processing fee. Under the personal finance category, borrowers can access between Ksh. 500 and Ksh. 50,000, with loan limits increasing based on borrowing and repayment behavior.
The fund charges an 8% annual interest rate, calculated per day. A Ksh. 1,000 loan accrues Ksh. 3.60 in interest over 14 days, while a Ksh. 50,000 loan would accrue Ksh. 153 over the same period.
With these revelations, the government faces mounting pressure to implement stricter verification measures and enhance oversight to prevent further financial mismanagement. The integrity of the Hustler Fund, a key initiative for financial inclusion, is now under scrutiny, and urgent reforms are necessary to restore public confidence in the program.
