As the Hustler Fund approaches its second anniversary, the government is preparing to review the credit limits for at least two million borrowers with positive credit scores. This review is part of a broader initiative aimed at improving access to credit for responsible borrowers and linking them with commercial banks for further financial growth.
The announcement was made by the Principal Secretary for Micro, Small, and Medium Enterprises (MSME) Development, Susan Mang’eni, during an appearance on The Shift on KBC Channel 1. Mang’eni emphasized that the adjustment of credit limits would not only reward good borrowers but also encourage timely repayments and foster a stronger relationship between the digital lending platform and traditional banking institutions.
“We are looking at a strategic review of credit limits for those with a positive credit history. The aim is to gradually move these borrowers from the digital lending space into the formal banking sector. This process will be facilitated by the introduction of a product we call ‘Bridge,’ which will act as a link between the Hustler Fund and commercial banks,” said Mang’eni.
Since its inception in November 2022, the Hustler Fund has disbursed Ksh 60 billion in loans, benefiting over 25 million borrowers. The initiative was designed to provide affordable credit to micro, small, and medium enterprises (MSMEs) and individuals, primarily targeting those who traditionally lack access to formal credit channels. The fund has also managed to mobilize Ksh 3.3 billion in savings, reflecting its broad reach and popularity among Kenyans.
Out of the 25.4 million total borrowers, 8.5 million are repeat customers, which demonstrates the fund’s role in meeting the financial needs of many people. Notably, over two million of these borrowers have demonstrated positive credit behavior, and they are now set to benefit from increased loan limits. For many, this increase in borrowing capacity could significantly impact their ability to grow their businesses or meet personal financial needs.
The review of the credit limits will be based on borrowers’ credit ratings, which will be segmented into categories ranging from C to A. Borrowers with higher ratings will see their credit limits increased, with some even experiencing a doubling or tripling of their borrowing capacity, depending on their creditworthiness. This tiered approach is designed to incentivize responsible borrowing and timely repayment, ensuring that the fund’s impact is sustainable in the long run.
Mang’eni also highlighted that the government’s focus on responsible lending and borrowing is critical to the fund’s success. “The review of credit limits is intended to reward good borrowers who have maintained a positive credit history. It’s part of a larger strategy to ensure that Hustler Fund remains a viable and sustainable model for supporting MSMEs,” she said.
However, the Hustler Fund is also grappling with significant unpaid loans, which currently stand at approximately Ksh 11 billion. As part of the ongoing efforts to manage this, the government is putting in place recovery measures aimed at reaching out to borrowers who have defaulted on their loans. Mang’eni explained that the authorities would engage with these borrowers to understand the reasons behind their failure to repay. “We will work closely with borrowers who are struggling, to establish the root causes of non-payment and provide solutions where necessary,” she added.
The upcoming credit limit review is seen as a pivotal moment for the Hustler Fund, signaling a move toward more formal financial inclusion. It is also expected to have a positive impact on Kenya’s overall financial ecosystem by integrating digital lending platforms with established banks. As the Hustler Fund continues to grow, the government is committed to refining the initiative to benefit both borrowers and lenders, ensuring that it remains a critical resource for economic empowerment.
In conclusion, the planned review of credit limits for good borrowers is a significant step forward in strengthening the Hustler Fund’s role in promoting financial inclusion. By linking responsible borrowers with commercial banks, the government aims to create a more robust and sustainable financial ecosystem that benefits individuals, businesses, and the broader economy.
