The Financial Inclusion Fund, commonly known as the Hustler Fund, has come under intense scrutiny following a damning report by the Auditor General. The report exposes significant lapses in loan management, financial oversight, and governance, raising serious questions about the Fund’s sustainability and accountability.
Established under the Public Finance Management (Financial Inclusion Fund) Regulations, 2022, the Hustler Fund was a flagship initiative of President William Ruto’s administration. The government envisioned the Fund as a vehicle to provide financial access to the informal sector, enabling small businesses and low-income earners to access credit without the usual constraints of income level, credit history, or savings. To further streamline its operations, Executive Order No. 1 of 2023 placed the Fund under the State Department for Micro, Small, and Medium Enterprises (MSMEs) within the Ministry of Cooperatives and Development of MSMEs. However, the latest financial audit suggests that the Fund may not be living up to its promise.
The Auditor General’s report paints a worrying picture of the Fund’s loan portfolio. As of 30 June 2024, the Fund had disbursed loans amounting to Kshs. 12.3 billion. However, Kshs. 8.7 billion—accounting for 64% of the total loans—remained unpaid for over a year, casting doubt on the recoverability of these funds. In a further troubling revelation, Kshs. 1.6 billion in duplicate loans was identified, while Kshs. 210.4 million in disbursed loans was inexplicably missing from outstanding loan records. Such discrepancies raise concerns over the accuracy and transparency of the Fund’s financial reporting.
Questionable Loan Account Management
The audit also uncovered irregularities in loan account management. Notably, 1,041 Safaricom-linked loan accounts were closed without the full repayment of loans, leaving an outstanding balance of Kshs. 818,645. Additionally, 30 other loan accounts, totalling Kshs. 598,987, were shut down despite outstanding debts. These findings suggest possible lapses in the Fund’s oversight mechanisms and bring into question the accountability of the service providers tasked with managing loan disbursements and repayments.
Beyond financial mismanagement, governance concerns also loom over the Hustler Fund. The Fund’s Chief Executive Officer, Elizabeth Nkukuu, has been serving in an acting capacity for over two years—far exceeding the six-month limit stipulated by law. The Board of Directors has not provided any justification for failing to appoint a substantive CEO through a competitive recruitment process, raising suspicions of mismanagement and institutional inertia.
Urgent Need for Reform
The Auditor General’s report underscores the urgent need for a thorough review of the Hustler Fund’s operations. Without immediate reforms, the Fund risks not only financial collapse but also the erosion of public trust in government-led financial inclusion initiatives. Key questions remain unanswered: How does the government plan to recover the outstanding loans? What measures are being taken to address duplicate and missing loan records? Why has the Fund failed to appoint a substantive CEO? And, most importantly, who is responsible for the apparent financial mismanagement?
