Mbadi slices budget of struggling Hustler Fund crippled by defaulters

Husler Fund received a merger Ksh.300 million, down from the ambitious Ksh.5 billion allocated in the previous financial year.

This was the second time that the fund, poised as affordable credit for Kenyans at the bottom of the pyramid, received a budget cut. In the 2023/24 financial year, the Hustler Fund, then the pride of Kenya Kwanza government, was allocated Ksh. 10 billion by then Treasury CS Njuguna Ndung’u.

The Ksh.300 million allocation by Mbadi was way lower than the expectations of the Micro, Small and Medium Enterprises Development ministry, which in May asked MPs to approve a Ksh.5 billion injection into the fund in the financial year 2025/26.

Principal Secretary Susan Mag'eni told the National Assembly’s Committee on Trade, Industry and Cooperatives to approve the budget for the sake of the 9 million active borrowers.

"Those who are doing better — we need to enhance their limit. And the moment you enhance someone's limit from Ksh.500 to Ksh.10,000, you have to fund, and that is why we are asking for additional funding. To fund the 4.5 million who will be graduating to the bridge and at the same time take care of the new applicants who are onboarding the Hustler Fund every day,” Mang’eni told MPs.

Fund crippled by defaulters

The Hustler Fund, a maiden project launched by President William Ruto in November 2022, 2 months into his tenure, has faced challenges from defaulters.

Then, Ruto said the Hustler Fund would help liberate more than 15 million people from predatory lenders by offering loans of up to Ksh.50,000.

In May 2025, PS Mang'eni said Ksh.65.7 billion had been disbursed, with repayments standing at Ksh.53.2 billion. The ministry of MSME’s sought to write off bad loans amounting to Ksh.6 billion borrowed by 10 million Kenyans in 2022.

MSMEs Cabinet Secretary Wycliffe Oparanya has previously raised concern that out of the 20 million Kenyans who began borrowing from the fund in 2022, only 2 million have demonstrated responsible borrowing behaviour.

The state has, in various instances, urged defaulters to pay their loans, as the Hustler Fund is “well-intentioned and meant to benefit many.”

The state has since explored different ways to reclaim its money, including a plan to get the money through M-Pesa accounts.

In October 2024, Hustler Fund acting CEO Elizabeth Nkuku told the National Assembly that despite several reminders, defaulters have failed to repay the loan.

“What we are looking at is to get money from their M-Pesa or airtime, we are in the process of considering appropriate legal provision,” she told the MPs.