By John Kariuki
The Hustler Fund, a groundbreaking financial inclusion initiative launched by President Ruto’s administration, is transforming the credit landscape in Kenya. By addressing the needs of the informal sector and uplifting those at the bottom of the economic pyramid, the Fund is creating new pathways for financial empowerment and economic growth.
In its latest innovation, the Hustler Fund introduced the "Bridge Loan," a financial product specifically designed for borrowers with strong credit ratings. This offering allows users to graduate from smaller personal loans to enhanced financing options, enabling them to scale their businesses and access new opportunities.
Since its launch in November 2022, the Hustler Fund has disbursed an impressive KSh 62 billion, directly benefiting over 25 million Kenyans. This achievement underscores its critical role in addressing the gaps in Kenya’s credit market, where many remain unserved and unbanked due to high-risk profiles, lack of collateral, and limited credit histories.
The Fund not only provides access to credit but also offers a platform for credit repair. It gives Kenyans who were previously blacklisted by credit reference bureaus an opportunity to rebuild their creditworthiness and re-enter the mainstream financial ecosystem. Additionally, the Fund integrates a mandatory savings mechanism, with 5% of each borrowing allocated to savings. Of this, 70% goes toward pension contributions, while 30% remains accessible for short-term needs. Voluntary savings options are also available, empowering beneficiaries to save for targeted investments such as affordable housing.
Principal Secretary in the State Department of Micro, Small, and Medium Enterprises, Ms. Susan Mangeni, described the Bridge Loan as a transformative addition to the Fund’s portfolio. “The Bridge Loan, which seeks to graduate successful Hustler Fund borrowers to enhanced financing in the commercial banking sector based on their credit ratings, has already disbursed over KSh 650 million since its rollout three weeks ago,” said PS Mangeni.
She emphasized that beneficiaries of the Bridge Loan will also benefit from strengthened relationships with banks, gaining the experience needed to expand their access to formal credit lines. “For business borrowers, this initiative creates an opportunity to be mainstreamed into a supportive financial ecosystem that goes beyond credit access. It includes capacity building, financial literacy, and market linkages,” she added.
The Bridge Loan, with an extended repayment term of 30 days compared to the 14 days offered on personal loans, is offered at a competitive interest rate of 8% per annum. This extended term and lower rate provide much-needed flexibility to borrowers, enabling them to invest in larger projects and scale their operations.
The launch of the Bridge Loan comes at a crucial time as Kenya’s start-up ecosystem continues to grow. However, with nearly 70% of start-ups failing within their first three years, access to capital remains a significant challenge. PS Mangeni noted that the government’s ongoing efforts, including the Start-Up Bill, aim to create a more favorable environment for innovation and investment. The Bridge Loan is expected to play a key role in addressing these challenges, reducing risks for entrepreneurs, and increasing their chances of success.
The Hustler Fund’s introduction of the Bridge Loan marks a significant evolution in Kenya’s financial landscape. By offering enhanced limits, longer repayment periods, and a pathway to mainstream banking, the Fund is empowering low-income earners to achieve greater financial independence.
For many borrowers, the opportunity to transition from smaller personal loans to business-oriented financing could be the catalyst for unlocking significant economic potential. As the Hustler Fund continues to expand its offerings, it is proving to be a vital instrument in Kenya’s quest for equitable and sustainable economic growth.
With initiatives like the Bridge Loan, the Hustler Fund reaffirms its commitment to fostering an inclusive financial ecosystem that supports individuals and businesses alike. This transformative approach is not only breaking barriers but also paving the way for a more prosperous future for millions of Kenyans.