Kenya Human Rights Commission Slams Hustler Fund as Political Gimmick, Calls for Its Termination
Quote from Lawyer on August 5, 2025, 6:01 amThe Kenya Human Rights Commission (KHRC) has released a scathing report titled "Failing the Hustlers," condemning the Hustler Fund, a flagship initiative of President William Ruto's Kenya Kwanza administration, as a politically motivated scheme that has failed to deliver on its promise of financial empowerment for low-income Kenyans. Launched in November 2022 with an initial capital of Ksh 50 billion, the Hustler Fund was designed to provide affordable credit to millions of Kenyans excluded from the formal financial system. However, the KHRC argues that the program is structurally flawed, economically unsustainable, and politically compromised, recommending its immediate scrapping.
The report highlights a staggering 68.3 percent default rate, indicating that for every Ksh 500 disbursed, approximately Ksh 340 is lost. Factoring in an average Treasury bill rate of 8.2 percent and a three percent operational cost, the KHRC estimates the total burden to taxpayers at 71.5 percent. By September 2024, over Ksh 53 billion had been disbursed, yet the commission found no measurable impact on enterprise development or job creation. The report describes the fund as a "loss-making scheme disguised as progress," arguing that it traps borrowers in a debt cycle rather than fostering self-reliance.
The KHRC criticizes the Hustler Fund's design, particularly its small loan amounts, ranging from Ksh 500 to Ksh 1,000 for first-time borrowers, which are deemed insufficient to start or grow meaningful businesses. The 14-day repayment period is labeled unrealistic, especially for informal traders operating in volatile economic conditions. Additionally, a mandatory five percent deduction for savings further reduces the usable loan amount, adding financial strain on borrowers. The commission argues that the fund's structure, requiring borrowers to take multiple loans to qualify for higher limits, locks users into perpetual borrowing without providing the capital needed for genuine business expansion.
The report also points to governance issues, noting that the Hustler Fund was launched without an oversight board, violating legal requirements. The highly centralized governance structure is seen as undermining the program's effectiveness, with a lack of transparency and poorly defined loan recovery regulations. The absence of collateral requirements, while intended to improve accessibility, has contributed to a perception that the loans are handouts, eroding credit discipline and financial education essential for sustainable lending.
Politically, the KHRC accuses the Hustler Fund of serving as a tool for patronage, designed to fulfill campaign promises rather than address genuine financial needs. The report suggests that the fund's politicization has fueled a perception that repayment is optional, further exacerbating the default crisis. Nairobi, Kiambu, and Nakuru counties are noted as leading consumers of the fund, but the commission argues that its benefits have been unevenly distributed and have failed to deliver on promises to boost sectors like agriculture, healthcare, housing, and the creative economy.
In response, Cooperatives and Micro, Small and Medium Enterprises Cabinet Secretary Wycliffe Oparanya defended the Hustler Fund, dismissing the KHRC report as misleading, biased, and politically motivated. Speaking in Nairobi on August 4, 2025, Oparanya claimed that over 26 million Kenyans have accessed the fund since its inception, with nine million actively repaying loans. He disputed the report's claim of a Ksh 50 billion capitalization, stating that only Ksh 14 billion has been injected, generating a portfolio of over Ksh 72 billion. Oparanya emphasized the fund's role in transitioning borrowers to the formal banking system, with over five million demonstrating strong repayment behavior, qualifying for larger "Bridge" loans. Principal Secretary for MSMEs Susan Mang'eni echoed these sentiments, questioning the timing and methodology of the KHRC report and asserting an 80 percent repayment rate.
Despite these defenses, the KHRC maintains that reforming the Hustler Fund is futile due to its fundamental flaws. The commission argues that the program's short repayment windows, inadequate loan sizes, and lack of integrated financial literacy programs render it unsustainable. The report estimates daily taxpayer losses of over Ksh 50 million due to the high default rate, describing the initiative as "quick money turned dead money."
The controversy comes amid broader concerns about the fund's management. A 2023 Auditor General report revealed a 32 percent default rate, with Ksh 10.9 billion of the Ksh 32 billion disbursed remaining unpaid. More recently, concerns have emerged about loans disbursed to ineligible borrowers, including minors as young as 10 days old, and a potential Ksh 6 billion write-off for untraceable defaulters. Lawmakers have expressed skepticism about allocating additional funds, with the National Assembly's Trade, Industry, and Cooperatives Committee rejecting a request for an additional Ksh 5 billion in the 2025/26 budget, citing the government's failure to recover outstanding loans.
As the debate intensifies, the Hustler Fund remains a polarizing initiative. While the government touts its success in expanding financial inclusion, critics argue it has become a costly burden on taxpayers, failing to deliver the economic transformation promised. The KHRC's call for its termination underscores the need for a more robust, transparent, and sustainable approach to empowering Kenya's hustlers
The Kenya Human Rights Commission (KHRC) has released a scathing report titled "Failing the Hustlers," condemning the Hustler Fund, a flagship initiative of President William Ruto's Kenya Kwanza administration, as a politically motivated scheme that has failed to deliver on its promise of financial empowerment for low-income Kenyans. Launched in November 2022 with an initial capital of Ksh 50 billion, the Hustler Fund was designed to provide affordable credit to millions of Kenyans excluded from the formal financial system. However, the KHRC argues that the program is structurally flawed, economically unsustainable, and politically compromised, recommending its immediate scrapping.
The report highlights a staggering 68.3 percent default rate, indicating that for every Ksh 500 disbursed, approximately Ksh 340 is lost. Factoring in an average Treasury bill rate of 8.2 percent and a three percent operational cost, the KHRC estimates the total burden to taxpayers at 71.5 percent. By September 2024, over Ksh 53 billion had been disbursed, yet the commission found no measurable impact on enterprise development or job creation. The report describes the fund as a "loss-making scheme disguised as progress," arguing that it traps borrowers in a debt cycle rather than fostering self-reliance.
The KHRC criticizes the Hustler Fund's design, particularly its small loan amounts, ranging from Ksh 500 to Ksh 1,000 for first-time borrowers, which are deemed insufficient to start or grow meaningful businesses. The 14-day repayment period is labeled unrealistic, especially for informal traders operating in volatile economic conditions. Additionally, a mandatory five percent deduction for savings further reduces the usable loan amount, adding financial strain on borrowers. The commission argues that the fund's structure, requiring borrowers to take multiple loans to qualify for higher limits, locks users into perpetual borrowing without providing the capital needed for genuine business expansion.
The report also points to governance issues, noting that the Hustler Fund was launched without an oversight board, violating legal requirements. The highly centralized governance structure is seen as undermining the program's effectiveness, with a lack of transparency and poorly defined loan recovery regulations. The absence of collateral requirements, while intended to improve accessibility, has contributed to a perception that the loans are handouts, eroding credit discipline and financial education essential for sustainable lending.
Politically, the KHRC accuses the Hustler Fund of serving as a tool for patronage, designed to fulfill campaign promises rather than address genuine financial needs. The report suggests that the fund's politicization has fueled a perception that repayment is optional, further exacerbating the default crisis. Nairobi, Kiambu, and Nakuru counties are noted as leading consumers of the fund, but the commission argues that its benefits have been unevenly distributed and have failed to deliver on promises to boost sectors like agriculture, healthcare, housing, and the creative economy.
In response, Cooperatives and Micro, Small and Medium Enterprises Cabinet Secretary Wycliffe Oparanya defended the Hustler Fund, dismissing the KHRC report as misleading, biased, and politically motivated. Speaking in Nairobi on August 4, 2025, Oparanya claimed that over 26 million Kenyans have accessed the fund since its inception, with nine million actively repaying loans. He disputed the report's claim of a Ksh 50 billion capitalization, stating that only Ksh 14 billion has been injected, generating a portfolio of over Ksh 72 billion. Oparanya emphasized the fund's role in transitioning borrowers to the formal banking system, with over five million demonstrating strong repayment behavior, qualifying for larger "Bridge" loans. Principal Secretary for MSMEs Susan Mang'eni echoed these sentiments, questioning the timing and methodology of the KHRC report and asserting an 80 percent repayment rate.
Despite these defenses, the KHRC maintains that reforming the Hustler Fund is futile due to its fundamental flaws. The commission argues that the program's short repayment windows, inadequate loan sizes, and lack of integrated financial literacy programs render it unsustainable. The report estimates daily taxpayer losses of over Ksh 50 million due to the high default rate, describing the initiative as "quick money turned dead money."
The controversy comes amid broader concerns about the fund's management. A 2023 Auditor General report revealed a 32 percent default rate, with Ksh 10.9 billion of the Ksh 32 billion disbursed remaining unpaid. More recently, concerns have emerged about loans disbursed to ineligible borrowers, including minors as young as 10 days old, and a potential Ksh 6 billion write-off for untraceable defaulters. Lawmakers have expressed skepticism about allocating additional funds, with the National Assembly's Trade, Industry, and Cooperatives Committee rejecting a request for an additional Ksh 5 billion in the 2025/26 budget, citing the government's failure to recover outstanding loans.
As the debate intensifies, the Hustler Fund remains a polarizing initiative. While the government touts its success in expanding financial inclusion, critics argue it has become a costly burden on taxpayers, failing to deliver the economic transformation promised. The KHRC's call for its termination underscores the need for a more robust, transparent, and sustainable approach to empowering Kenya's hustlers