The Hustler Fund, launched in November 2022 to empower micro, small, and medium enterprises (MSMEs) through accessible credit, is grappling with a significant challenge as loan defaults approach Sh10 billion.

Recent revelations from the National Treasury indicate a repayment rate of 73 per cent, shedding light on substantial impairments within the financial scheme.

As of October 2023, the fund disbursed a total of Sh36.6 billion, with a realization of Sh2.3 billion in savings.

The initiative has impacted 21.3 million customers, including 7.5 million repeat customers, maintaining an overall repayment rate of 73 per cent.

The National Treasury, responsible for overseeing the fund, released these figures, showcasing the stark reality of the financial hurdles faced by a considerable number of borrowers.

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The Treasury's data identifies the leading borrower, who accessed Sh4.5 million through 816 transactions.

Simultaneously, the most significant voluntary saver has accumulated Sh631,491.

These statistics underline the diverse financial needs and activities of the fund's participants.

Initially known as the Financial Inclusion Fund, the Hustler Fund emerged as an intervention to rectify market failures and shield MSMEs from exorbitant credit costs.

Within its inaugural year, the fund introduced a group product, attracting 50,000 active groups.

Out of these, 20,000 have received Sh151 million in support, indicating a substantial outreach within the MSME community.

President William Ruto, marking the fund's first anniversary on November 30, announced a window for users to access part of the Sh2.5 billion savings pool.

Additionally, borrowers received increased loan limits, providing a potential relief for participants.

Savers within the fund enjoy an interest rate closely tied to Treasury bill returns, estimated at 12 per cent in the first year.

To curb defaults, the fund introduced measures such as barring defaulters from accessing the new business loan facility – the Hustler Group loan.

President Ruto emphasized this stance in August, stating, "We have put money in the business loan account, but they will not get the loan until you clear your arrears."

As the Hustler Fund grapples with the challenge of mounting defaults, the government faces the intricate task of balancing financial inclusivity with prudent risk management.

The figures presented by the National Treasury underscore the complexities inherent in fostering economic empowerment while ensuring fiscal responsibility.