Gov't defends Hustler Fund spending after audit query

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The government has defended how it managed Sh8 billion under the Hustler Fund following an audit by the Auditor General, which questioned why the money was not utilised despite being allocated for matching long-term savings.

Principal Secretary for Micro, Small and Medium Enterprises (MSMEs) Susan Mang’eni, clarified that the money had been set aside to support a savings scheme for Hustler Fund beneficiaries, but was not drawn from the National Treasury by the close of the audit period on June 30, 2023.

“The savings product was still being developed at the time. It would have been wrong to release money only for it to sit idle in commercial banks,” said Ms Mang’eni in a press statement on Thursday.

She added that the matching savings scheme was officially launched on November 30, 2023, during the Fund’s first anniversary, and that her ministry will provide all the necessary documents to the Public Accounts Committee (PAC), which has given a two-week deadline.

In her report for the financial year ending June 30, 2023, Auditor General Nancy Gathungu raised a red flag over the whereabouts and utilisation of Ksh 8 billion meant to match savings made by Hustler Fund users.

The Auditor General noted that while the amount was budgeted for under the Financial Inclusion Fund, there was no evidence to show it had been transferred or used as intended.

This created concerns over whether the funds had been misapplied, diverted, or left idle without proper explanation.

The report triggered public interest and pressure on the government to clarify the status of the funds, especially amid growing scrutiny over transparency in state-run development programmes.

Ms Mang’eni stated that since the launch of the Hustler Fund in November 2022, a total of Sh71 billion has been disbursed to more than 26 million Kenyans, supporting access to affordable credit for small traders, youths, and low-income earners.

She added that nearly Sh4.8 billion has been mobilised in both voluntary and mandatory savings, and a new credit scoring system introduced by the Fund is already helping 4.5 million repeat users qualify for bigger loans under better terms.

She also pointed to the introduction of the bridge loan product, which helps trusted borrowers graduate to longer-term loans and build financial discipline.

“The Hustler Fund is a financial inclusion tool. It’s helping ordinary Kenyans access affordable credit and save for their future,” she said.