Editor’s note: Read the report here and watch its launch here.

A new report by the Kenya Human Rights Commission has sharply criticized the Hustler Fund, describing it as a politically expedient but economically disastrous initiative that has failed to deliver on its promises of financial empowerment for low-income Kenyans.

The report, “Failing the Hustlers,” concludes that the Hustler Fund is structurally unsound, economically unsustainable, and politically manipulated, and recommends that the government scrap it entirely.

Launched in November 2022 with a startup capital of Sh50 billion, the Hustler Fund was marketed as a game-changer for the Kenya Kwanza regime's “bottom-up” economic transformation agenda.

It promised to boost sectors such as agriculture, MSMEs, healthcare, housing, and the creative economy by offering accessible, affordable credit to millions of Kenyans locked out of the formal financial system.

However, the KHRC study found that this has not been achieved.

Quick money become dead money

By September 2024, over Sh53 billion had been disbursed. But the study found no measurable impact on enterprise development or job creation.

The loan amounts, ranging from just Sh500 to Sh1,000 for first-time borrowers, were too small to start or grow any meaningful business. Borrowers were given just 14 days to repay, a window KHRC deems unrealistic.

Worse still, the design of the Hustler Fund locks borrowers into a debt cycle.

A mandatory five percent deduction is made from each loan for savings before the money is disbursed, further reducing its utility. Borrowers must continue borrowing to qualify for slightly higher amounts, an unsustainable pattern that pushes low-income Kenyans deeper into financial distress.

Huster Fund’s performance metrics are equally poor.

By the end of 2022, the default rate stood at 68.3 percent. KHRC calculates that for every Sh500 disbursed, Sh340 is effectively lost. When added to the average Treasury bill rate of 8.2 percent (as of December 2022) and the three percent operational cost prescribed by law, the total estimated cost to the taxpayer reaches 71.5 percent.

“This is not financial empowerment. It is a loss-making scheme disguised as progress,” the KHRC said in the report. “Quick money has become dead money.”

KHRC also flagged governance failures.

The Office of the Auditor General could not conduct a full audit due to missing documentation and unsupported transactions.

The Fund was also launched without an oversight board, violating the law. Only after litigation did the government move to appoint one. Transparency around loan allocation criteria, regional disbursement data, and performance tracking remains missing.

KHRC contends that the Hustler Fund has become more of a political tool than a financial solution as it was rolled out after elections to fulfill campaign promises rather than to address fundamental economic needs.

“There is a growing perception that the Fund is a political reward for voting, and therefore repayment is optional,” the report warns. “This perception threatens the Fund’s credibility and undermines public accountability.”

Attempts to reform the Fund, KHRC says, would be futile. Technical tweaks cannot fix its design, political, and legal flaws.

“The evidence leads to a singular and inescapable conclusion that the Hustler Fund has failed and should be scrapped,” the report states.