The Hustler Fund is facing a severe Ksh5 billion liquidity crunch that has locked out thousands of existing borrowers, particularly those seeking bridge loans.

This revelation emerged during a Thursday, May 21, 2026, meeting of the Parliamentary Committee on Trade, Industry and Investment, chaired by Hon. Bernard Shinali.

The committee was reviewing the FY 2026/27 budget estimates when State Department officials for MSMEs disclosed the fund’s dire situation. Despite having disbursed Ksh14.4 billion since inception and reaching millions of small-scale entrepreneurs, the fund now requires an immediate Ksh5 billion injection to restore liquidity and allow opted-in clients to access credit.

When the Hustler Fund was unveiled in late 2022, it was presented as a revolutionary tool for financial inclusion. Boda boda riders, mama mbogas, kiosk owners, and young hustlers were promised affordable credit as an alternative to predatory mobile lenders.

“The Principal Secretary also informed lawmakers that the Hustler Fund requires enhanced financial and institutional support to maintain liquidity, expand access to affordable credit and support the transition of beneficiaries into the formal financial sector.

The committee was told that the fund currently requires an additional KSh5 billion to address liquidity challenges affecting clients who have already opted into the programme but are unable to access borrowing facilities, particularly under the bridge loan product,” read the post in part.

The government initially committed Ksh50 billion, with Ksh20 billion injected in the launch year. However, reality has been harsher. Allocations have steadily declined: Ksh5 billion in 2023/24, Ksh2 billion in 2024/25, Ksh300 million in the current year, and zero shillings proposed for 2026/27. By June 2025, only Ksh14.8 billion had been released against the ambitious pledge.

Parliamentary scrutiny

Treasury officials maintain the fund was designed as a revolving facility that would eventually sustain itself through repayments. However, legislators questioned this model, noting repeated reliance on fresh Exchequer injections undermines its self-sustaining intent.

The crunch has left many borrowers unable to access funds despite meeting initial eligibility. This comes amid broader economic pressures, high living costs, elevated fuel prices, and heavy taxation, that have strained repayment capacities for small businesses.

At the same meeting, the committee pushed strongly for intensified financial literacy programmes before any further expansion of MSME funds, including the NYOTA Programme, which has already disbursed Ksh2.28 billion in start-up capital to youth enterprises.

The State Department is seeking an additional Ksh11.3 billion for NYOTA to onboard 121,800 new beneficiaries. Unlike the Hustler Fund’s direct lending focus, NYOTA emphasises skills development and enterprise support, backed partly by World Bank funding.

Youth enterprise grants

MPs expressed concern that without proper education, beneficiaries risk mismanaging loans, perpetuating dependency rather than fostering genuine entrepreneurship.

The shift in emphasis signals a quiet pivot: from politically potent but operationally challenging mass lending to more structured, donor-friendly interventions.

For President Ruto, the Hustler Fund was more than policy; it was the emotional core of his 2022 campaign. Its gradual sidelining in budgets risks eroding trust among the very base that propelled Kenya Kwanza to power. While Treasury insists the fund is not being abandoned, the numbers tell a story of retreat.