President William Ruto has hit out at reports calling for the abolition of the Hustler Fund, defending the fund as one that has been largely beneficial to Small, Medium, and Micro Enterprises (SMMEs).
Ruto spoke during a private sector roundtable on Wednesday, August 6, where he listed some of the benefits of the fund, which was launched in 2022 with an initial capital of Ksh50 billion.
Amid criticism from the "Failing the Hustlers" report by the Kenya Human Rights Commission (KHRC), Ruto reaffirmed that although the fund has its flaws, it significantly benefits Kenyans because it remains one of the most reliable indicators of their credit ratings.
"Today, under the Hustler Fund, your credit behaviour becomes your collateral. It becomes what licenses you to borrow the next bigger amount of money," President Ruto explained.
The Head of State also highlighted the Hustler Fund's bridge loan product, which he claims has benefited over 650,000 Kenyans. According to Ruto, the government had access to the credit history of 26 million Kenyans through the Hustler Fund, which has helped the government institutionalise other collateral mechanisms other than the traditional means through properties like loans and logbooks.
He added, "For your information, banks are now beginning to absorb those who have come through for the hustler funds because they have gone through the hustler fund records."
"They may not have a title deed or logbook, but they are well-behaved borrowers and business people."
The president also refuted the default rate figure from the KHRC, which stood at 68 per cent, instead saying the Hustler Fund had a repayment rate of 83 per cent.
President Ruto further accused the KHRC of elitism, adding that the report did not take into account the woes of the common citizen.
"I want to persuade my good friends from Nairobi and posh hotels that there are Kenyans who today have a mechanism for them to borrow money. For your information, these people who borrow Ksh5,000 or Ksh10,000 have mobilised Ksh5 billion in savings over the last 3 years," the president went on.
From the KHRC's report, the commission estimated that by the end of 2022, there was a default rate of 68.3 per cent, meaning that for every Ksh500 loan disbursed, Ksh340 was effectively lost. These losses, according to the commission, did not factor in the systematic costs of setting up the programme.
With this in mind, the KHRC estimates that 71.5 per cent of all loans under the Hustler Fund are functionally unrecoverable.
Ruto's response occurred just a day after Cabinet Secretary for the Ministry of Co-operatives, Wycliffe Oparanya, claimed that the commission was manipulating the 2022/2023 Auditor General's report, highlighting that many of the concerns mentioned in the report had not yet been finalised.
