A financial rescue plan aimed at supporting small businesses has been thrown into controversy after an audit revealed that thousands of ineligible individuals—including infants and even unborn borrowers—received loans from the Hustler Fund.

Auditor General Nancy Gathungu’s latest report for the 2023/2024 financial year has exposed glaring inconsistencies in the fund’s records, showing that Sh31.8 million was distributed to 44,167 recipients who did not meet the eligibility criteria.

Among them were 1,186 children, some just 10 days old, who collectively received Sh681,395.

Even more perplexing, 42,981 loan recipients had birth dates set in the future, between July 2024 and December 2073, and received a total of Sh31,135,690.

This revelation has raised alarms over the credibility of the fund’s data, with the Auditor General questioning the effectiveness of controls in place to prevent such anomalies.

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"A review of the customer and opted-in datasets provided revealed that some customers were below the mandatory age of eighteen (18) years, while others had birth dates set in the future, beyond 30 June 2024," the report stated.

"In these circumstances, loan agreements with underage individuals are potentially unenforceable and increase the likelihood of default," it added.

The Hustler Fund, a flagship initiative of President William Ruto’s administration, was introduced in 2022 to provide financial assistance to individuals and businesses unable to access traditional credit.

The programme features four loan categories—personal, micro, SME, and startup loans—with amounts ranging from Sh500 to Sh250,000.

Borrowers are required to be at least 18 years old, possess a national ID, and have a registered mobile number, yet these criteria appear to have been bypassed in thousands of cases.

Beyond eligibility concerns, the report also reveals that a significant portion of the fund remains unpaid.

As of 30 June 2024, an outstanding Sh8.7 billion—representing 64 per cent of the total loan receivables—had been overdue for over a year, raising fears of possible financial losses.

Additionally, 1,041 loan accounts were shut down despite their loans not being fully repaid.

These accounts had borrowed a total of Sh1.5 million, but only Sh646,870 had been recovered before their closure.

"Records provided indicate that approximately Sh8,737,216,077, or 64 per cent of the fund’s total loan receivables as of 30 June 2024, remained outstanding for more than one year, raising doubts over whether the fund will ever recover the loans issued to borrowers," the report stated.

With these revelations, concerns are mounting over the fund’s management and whether sufficient oversight exists to prevent further losses.

The extent to which these irregularities have affected taxpayers and the sustainability of the programme remains a pressing question.