President William Ruto administration plans to use borrowing and repayment behaviour records to determine who qualifies for higher Hustler Fund limits, a move aimed at converting an estimated 10 million repeat borrowers into bankable customers.
The new system will build on the Fund's existing credit scoring by incorporating alternative data and potentially the history of borrowing from banks, Saccos, mobile lenders and other financial institutions.
The State Department for MSMEs Development says it will pilot alternative-data use by analysing the financial behaviour of recurrent borrowers to inform enhanced credit limits, new products and refinancing opportunities.
““The sub-sector will leverage on the Financial Inclusion Fund (Hustler Fund) to pilot the use of alternative data by analysing financial behaviors of recurrent borrowers with enhanced credit limits,” the department says in its draft 2027/28-2028/29 Medium Term Expenditure Framework report.
“Insights from this pilot will inform product innovation, graduation pathways and refinancing opportunities.”
The plan represents the next stage in a credit-scoring system that was expanded in December 2024 when President Ruto launched the Bridge Loan product. The product allowed qualifying borrowers to access up to three times their existing Hustler Fund limit at the unchanged annual interest rate of 8 percent, while extending repayment from 14 to 30 days.
Bridge borrowers were placed into nine credit-score categories based on their borrowing and repayment behaviour, with consistently good borrowers receiving the highest ratings.
Borrowers with an A1 rating were considered excellent, while C3 represented the weakest creditworthiness on the platform.
The Ruto administration now wants to move beyond Hustler Fund's own repayment records by using wider financial behaviour to establish who can safely handle more credit.
“The reason we came up with Bridge product is to start giving our good borrowers some banking experience, so that from there they can now graduate to the commercial banking sector,” Principal Secretary for MSMEs Susan Mang'eni said recently.
Ms Mang'eni said the government is working with banks, the Africa Guarantee Fund and credit reference bureaus to strengthen behavioural credit ratings using alternative data.
“We are working together, and we are seeing how we can now concretise these behavioural credit rating and building it up with alternative data mapping,” she said.
The result is to develop to develop a national credit score that could help borrowers move into the formal financial system.
“This national credit score is going to become a collateral to help these people to graduate to formal financial system where they can be served to higher loan limit,” she said.
The proposed system could allow a borrower's financial behaviour outside Hustler Fund to guide future access to credit.
The State Department is working with the Central Bank of Kenya, Kenya Bankers Association, credit reference bureaus, Safaricom, Sacco regulators and other industry players on the alternative-data framework.
The department says the exercise has identified potential sources of alternative data and proposed consumer-led, consent-based mechanisms for sharing information beyond traditional credit bureaus.
When Hustler Fund was launched, more than eight million borrowers had reportedly been listed by Credit Reference Bureaus, according to the State Department.
Ruto administration insists that 4.5 million borrowers who had previously been listed have earned A and B ratings through consistent and timely repayment.
More than 10 million Kenyans are also repeat borrowers, creating a large pool whose financial behaviour can potentially be used to assess eligibility for larger facilities.
The commercial banking sector is already using insights from Hustler Fund's lending system to expand digital credit.
KCB Group's mobile lending rose 30 percent to Sh544 billion in 2025, equivalent to about Sh1.5 billion a day, with the lender attributing part of the growth to the data and credit-scoring infrastructure developed around Hustler Fund.
“We created the platform and helped with the credit scoring, and the money comes from the government because they are the ones lending,” KCB Finance Director Lawrence Kimathi said in March.
He said the system allowed borrowers requesting mobile loans to receive funds within seconds, supported by the platform's stability and data generated through Hustler Fund.
The government is seeking to expand this model as annual lending to women, youth and people with disabilities has declined from Sh22.27 billion in 2023/24 to Sh17.94 billion in 2024/25 and Sh16.52 billion in 2025/26.
Although each amount exceeded the department's Sh10 billion annual target, the decline underscores the challenge of expanding credit while ensuring larger loans go to borrowers with evidence of their ability to repay.
Cumulative revolving credit issued under Hustler Fund has reached Sh88.92 billion, according to the State Department.
The new scoring system is intended to help solve that problem by distinguishing borrowers according to their actual financial behaviour rather than treating customers with limited formal credit histories alike.
For borrowers, this could make repayment records across different financial institutions increasingly important in determining how much they can access.
The ultimate test will be whether better credit information helps borrowers move beyond repeated small digital loans into larger, productive financing.
