Auditor General Nancy Gathungu Flags Over KSh 824m Hustler Fund Seed Money Lying In Bank Unused

• President William Ruto's administration established the KSh 50 billion Hustler Fund initiative to increase financial access and inclusion to the underserved Kenyans
• The scheme was funded under the Financial Inclusion Fund established under Public Finance Management Regulations 2022
• This saw the National Treasury allocate KSh 12 billion to the kitty in the financial year 2022/23 via two commercial banks, KCB and Family Bank
• An audit report from the office of the auditor-general indicates that over KSh 824 million from the scheme remain unutilised

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

President William Ruto's flagship project, the Hustler Fund, is now a year since its launch in November 2022.

The KSh 50 billion scheme aimed at increasing financial access and inclusion to the unserved and underserved Kenyans through affordable credit, savings, and insurance facilities.

How Hustler Fund was established

A report by Auditor General Nancy Gathungu indicated that the fund was established under Public Finance Management (Financial Inclusion Fund) Regulations 2022.

"The objective and purpose of the Fund was to innovate, develop and deploy bottom-of-the-pyramid financial services and products that are affordable, accessible and appropriate for the unserved and underserved persons, including credit, saving, insurance and investment products," read the report in part.

Gathungu noted that the National Treasury allocated KSh 12 billion to the State Department for Co-operative as seed money for the scheme.

The budget allocation happened during the financial year 2022/2023, ahead of the Hustler Fund launch.

Distribution of Hustler Fund seed money

The state department subsequently disbursed KSh 9.46 billion to the Kenya Commercial Bank (KCB) and KSh 2.54 billion to Family Bank.

The two lenders were to transmit the money to three (3) telecommunication companies (Safaricom, Airtel and Telkom) for onward lending to eligible persons.

The audit report indicated that KCB received an additional KSh 1 billion from Family Bank, bringing the total funds held by the lender to KSh 10.4 billion.

Is Hustler Fund achieving its mandate?

KCB distributed KSh 9,042,979,000, KSh 540,349,661 and KSh 51,692,891 to Safaricom, Airtel, and Telkom, respectively, totalling KSh 9.6 billion.

The lender was left with a balance of KSh 824,978,448 as of the close of the financial year under review.

"The balance at KCB remains unutilised, thereby undermining the urgency with which the amount was sought under Article 223 of the Constitution," Gathungu noted.

This followed the Hustler Fund anniversary, which saw the government increase loan limits based on borrowing commitments.

Borrowers who have taken ten loans received a 100% increase, 50% for five loans, and 40% for two loans.