A report by the Auditor General, Nancy Gathungu, auditing the Hustler Fund for the financial year 2023/2024, has revealed staggering irregularities in the birth dates of some beneficiaries.
According to Gathungu, Ksh 31.8 million was disbursed to 44,167 underage beneficiaries—some as young as 10 days old—and to unborn borrowers with future birth dates ranging from July 2024 to December 2073.
The report indicates that 1,186 children, aged between 10 days and 17 years, received a total of Ksh 681,395 from the Hustler Fund, while 42,981 individuals with future birth dates received Ksh 31,135,690.
According to the Auditor General, loan agreements with underage beneficiaries are unenforceable and contribute to a higher rate of loan defaults.
The Auditor General termed the records unreliable, stating that the resultant data in the system may lack adequate controls.
"A review of the customer and opted-in datasets provided revealed that some customers were below the mandatory age of eighteen (18) years, while others had birth dates set in the future, beyond 30 June 2024," the report stated.
"In these circumstances, loan agreements with underage individuals are potentially unenforceable and increase the likelihood of default," she added.
The Hustler Fund, a key initiative of the Kenya Kwanza administration, was launched by President William Ruto back in 2022, targeting to provide accessible financial support to small businesses and entrepreneurs across the country.
The Fund consists of four products under the fund, including personal finances, microloans, SME loans, and Startups. For the personal finance scheme, the amount one can take begins at Ksh500 and is capped at Ksh50,000, depending on one's score, while SMEs and Startups can access up to Ksh 250,000.
For one to access the loans, he/she must be a Kenyan citizen of 18 years of age and above, have a valid national ID, and must have a registered mobile number, a threshold that has not been met by these beneficiaries.
The Auditor General has further disclosed that approximately Ksh 9 billion of the fund’s total loan receivables remained outstanding for more than one year as of 30 June 2024.
Furthermore, according to the report, 1,041 accounts whose principal amounts had not been fully repaid were closed. The loans disbursed through these accounts totalled Ksh 1.5 million, but they were closed after only Ksh 646,870 had been repaid.
"Records provided indicate that approximately Ksh 8,737,216,077, or 64% of the fund’s total loan receivables as of 30 June 2024, remained outstanding for more than one year, raising doubts over whether the fund will ever recover the loans issued to borrowers," the report stated.
Last year in December, Ruto revealed that more than two million borrowers on Hustler Fund would increase their borrowing limit by as much as 300 per cent.
