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Farmers shun Hustler Fund to seek cash from friends, saccos, banks
Cooperatives and Micro, Small, and Medium Enterprises Cabinet Secretary Wycliffe Oparanya addressing journalists during the inauguration of the Committee of Experts to review the Sacco Societies Act and the inauguration of the new Kenya Union of Savings and Credit Cooperative Organisations (Kuscco) Board at NSSF Building in Nairobi on May 21, 2025.
Farmers have cut their appetite for loans from the Hustler Fund in favour of seeking cash from friends and relatives, Saccos and banks, a fresh Central Bank of Kenya (CBK) survey shows.
Central Bank disclosures show the proportion of farmers using the affirmative action fund has been shrinking from 10.3 percent in July 2023 to a high of 20 percent in November 2024 to four percent in January 2026.
Launched in 2022, the Financial Inclusion Fund (FIF), commonly known as the hustler fund, was perceived to be a game-changer by the Kenya Kwanza administration in serving the informal sector workers with loans ranging from Sh100 to Sh50,000 to foster financial inclusion.
According to the CBK survey, the overall proportion of farmers who reported having borrowed to finance farming picked up further to 48 percent in January 2026, compared to 37 percent in November 2025.
But fewer farmers are tapping the State-backed loans, which come with interest of up to eight percent per annum and has been bogged down by high default rates.
Repayment is required within 14 days and late payments increase the interest to 9.5 percent per annum and freeze the account after 30 days.
“Borrowing from friends and family was reported by 42 percent of sampled farmers in January 2026 compared to 25 percent in November 2025, while the proportion of those who reported having accessed digital loans increased further to 26 percent compared to 23 percent in November 2025,” says the survey.
The proportion of farmers that accessed bank loans increased by 33 percent in January 2026 compared with 30 percent in November 2025 largely due to the sustained monetary policy easing by the CBK, which has resulted in relatively lower lending rates explaining the continued uptick in borrowing from banks.
The proportion of farmers who reported borrowing from Savings and Credit Co-operatives (Saccos) declined to 18 percent of the sampled farmers in January 2026 from 30 percent in November 2025.
According to the survey, farmers typically borrow to purchase farm inputs, with the proportion having borrowed for this purpose increasing by 84 percent in January 2026 from 73 percent in November 2025.
The proportion reporting using agricultural loans to meet labor costs also picked up to 75 percent in January 2026 from 47 percent in November 2025.
The survey report summarizes findings from the survey conducted from January 19-23, 2026.
The survey sampled 320 respondents, out of which farmers and retailers accounted for 42 percent and 43 percent, respectively, while wholesalers accounted for 15 percent.
The Hustler Fund was introduced in 2022 to provide cheaper credit to individuals and businesses at the bottom of the pyramid to settle day-to-day expenses such as payment of workers and purchase of inputs.
Hustler Fund, the government’s microcredit scheme, which was launched in 2022, faces significant sustainability challenges, with default rates reaching as high as 78 percent.
As of March 2026, the Hustler Fund had disbursed Sh83 billion since its inception, with a default rate that has dropped to 15 percent from a high of 78 percent that was reported in 2024.
Out of the Sh83 billion borrowed, only Sh71 billion has been repaid, with borrowers defaulting on about Sh12 billion.
The Cabinet Secretary for Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development Wycliffe Oparanya said in September last year (2025) that Kenyans who borrowed from the Hustler Fund and defaulted may be barred from accessing loans from banks and other financial institutions.
