The Hustler Fund was launched with the ambitious goal of democratizing access to finance, particularly for low-income Kenyans. However, new findings by the Central Bank of Kenya (CBK) and the Kenya National Bureau of Statistics (KNBS) reveal a stark contrast between the fund’s intended purpose and its actual impact. The latest data shows that a significant 35.8 percent of those accessing the fund belong to the highest wealth quintile, while only 18.7 percent are from the lowest.
This data illustrates a concerning trend high-income earners are disproportionately using the Hustler Fund. The fund, originally aimed at providing low-interest loans to empower the economically marginalized, is being utilized more by middle- and high-income groups. The 2024 Finaccess Report notes that the majority of users are between 26 and 35 years old, with urban areas showing higher uptake at 35.4 percent compared to 24.2 percent in rural regions. This pattern underscores a significant gap in financial inclusion, particularly affecting rural youth, who account for 45.5 percent of those financially excluded.
The report suggests that poor customer service and unfavorable loan terms discourage use among lower-income groups. Many microfinance institutions and insurance account holders face barriers that prevent them from accessing the fund. Moreover, the mobile money platform, which offers the fund’s loan services, is more popular among urban, formally employed individuals. The survey highlights that the Hustler Fund’s appeal lies in its accessibility and the convenience of mobile transactions, particularly in urban settings where formal employment is more common.
Despite these challenges, there has been some progress. Formal financial access in Kenya rose marginally to 84.8 percent in 2024 from 83.7 percent in 2021, largely driven by advancements in digital technology. However, 9.9 percent of Kenyan adults remain financially excluded, with barriers such as a lack of mobile phones (64.1 percent) and national identification cards (51.5 percent) playing a significant role. This highlights the persistent need for targeted interventions to address financial exclusion, especially in underserved areas like Turkana, West Pokot, and Narok.
To align with its Bottom-Up Economic Transformation Agenda, the report suggests that enhancing the terms and conditions of the Hustler Fund loan facility could better serve its intended beneficiaries low-income households and youth. The government’s recent announcement to increase borrowing limits and extend repayment periods is a step in the right direction, but more needs to be done to ensure these benefits reach those who need them most.
The findings indicate a need for a more focused approach to financial inclusion in Kenya. The Hustler Fund, despite its good intentions, is not yet serving its purpose effectively for the poorest and most vulnerable in society. As the government looks to expand and adjust the fund, it must consider ways to make it truly accessible to all, regardless of wealth, and ensure that financial products meet the needs of low-income households.
This report and its implications underscore the ongoing challenge of bridging the financial inclusion gap in Kenya. As digital financial services grow in popularity, the government’s role in facilitating access to affordable credit will be crucial in driving inclusive economic growth. The Hustler Fund, with its targeted adjustments and increased outreach, could yet fulfill its promise to empower those at the base of the economic pyramid. However, this will require ongoing monitoring and adaptation to ensure it reaches those most in need.
