Ruto administration plans wider credit scoring to help Hustler Fund borrowers access larger loans

The Kenyan government plans to use borrowing and repayment records from across the financial sector to help determine which Hustler Fund borrowers qualify for higher loan limits.

The proposed system would build on the Fund’s existing credit scoring by analysing the financial behaviour of recurrent borrowers, potentially drawing on records from banks, Saccos, mobile lenders and other financial institutions. The State Department for MSMEs Development says the pilot could also inform new products, refinancing opportunities and pathways into formal credit.

The proposal is contained in the department’s draft 2027/28–2028/29 Medium Term Expenditure Framework report. It aims to turn the repayment histories of an estimated 10 million repeat borrowers into more comprehensive credit profiles, giving lenders a clearer basis for assessing customers who may have limited conventional credit records.

Government plans broader credit assessment for repeat borrowers

The State Department says it will pilot the use of alternative data by analysing the financial behaviour of recurrent Hustler Fund borrowers. The findings are expected to inform enhanced credit limits, product innovation, graduation pathways and refinancing opportunities.

Alternative data in this context could include borrowing and repayment information from financial institutions beyond Hustler Fund. The proposed framework is being developed with the Central Bank of Kenya, Kenya Bankers Association, credit reference bureaus, Safaricom, Sacco regulators and other industry players. According to the department, potential data sources have been identified, alongside consumer-led and consent-based mechanisms for sharing information beyond traditional credit bureaus.

The broader objective is to establish a behavioural credit profile that can help borrowers access larger facilities. Principal Secretary for MSMEs Development Susan Mang’eni recently said the government was working with banks, the Africa Guarantee Fund and credit reference bureaus to strengthen behavioural ratings using alternative data.

“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,” Mang’eni said.

She also described the longer-term ambition as developing a national credit score that could support access to higher loan limits in the formal financial system. That score, however, remains a proposed policy objective rather than an established national system.

How the proposed alternative-data system would work

Hustler Fund already uses borrowers’ repayment behaviour to assess creditworthiness. The proposed pilot would extend that approach by looking beyond a borrower’s history within the Fund, potentially giving lenders a broader view of how the customer manages credit across different institutions.

A borrower might, for example, have a Hustler Fund repayment record alongside a bank loan, a Sacco facility or a mobile-credit account. Bringing permitted information from these different sources into a more comprehensive assessment could help distinguish borrowers with demonstrated repayment capacity from those whose financial histories remain limited or difficult to assess.

The exact data sources, scoring methodology and information-sharing rules have yet to be fully established in the supplied policy material. The department’s reference to consumer-led, consent-based sharing is therefore significant, but it should not be interpreted as confirmation that all financial activity will automatically be included in the proposed system.

The quality of the data will also matter. A credit score is only useful when the information behind it is accurate, current and interpreted in context. Borrowers will need clear ways to understand how their records are used, correct errors and challenge information that unfairly affects their access to credit.

Bridge Loan laid the groundwork for differentiated credit

The proposed scoring expansion follows the launch of Hustler Fund’s Bridge Loan product in December 2024. The product allowed qualifying borrowers to access up to three times their existing Hustler Fund limit at an annual interest rate of 8 percent, while extending the repayment period from 14 to 30 days.

Bridge borrowers were placed into nine credit-score categories based on their borrowing and repayment behaviour. Those with the strongest records received the highest ratings, with A1 classified as excellent and C3 representing the weakest creditworthiness on the platform.

The product was designed to give reliable borrowers access to larger facilities while providing experience with a more structured form of credit. The proposed alternative-data pilot would build on that principle, but with a wider view of a borrower’s financial behaviour.

The State Department says more than 10 million Kenyans are repeat borrowers, creating a substantial pool of customers whose records could potentially be used to assess eligibility for larger facilities. It also says 4.5 million borrowers who had previously been listed by credit reference bureaus have earned A and B ratings through consistent and timely repayment. These figures should be read alongside the department’s definitions and reporting dates, since borrower counts and credit-rating categories can vary depending on how they are measured.

Hustler Fund data is already informing commercial lending

The proposed expansion comes as Hustler Fund’s credit-scoring infrastructure is already being used in the wider digital-lending ecosystem. KCB Group has attributed part of the growth of its mobile lending business to the data and technology developed around the Fund.

KCB’s mobile lending rose 30 percent to Sh544 billion in 2025, according to the lender. KCB Finance Director Lawrence Kimathi said the bank had helped create the Hustler Fund platform and its credit-scoring system, while the government provided the funds being lent.

He said the infrastructure enabled customers requesting mobile loans to receive money within seconds, supported by the platform’s stability and the data generated through Hustler Fund.

The example illustrates why the government sees value in extending the credit-information model. Hustler Fund has generated a large volume of repayment data, while commercial lenders already use digital systems to assess and serve customers at speed. A broader framework could connect these capabilities, although access to data and the terms under which it can be used will depend on the final regulatory arrangements.

Wider credit histories could support formal financial inclusion

The policy is aimed at addressing a familiar challenge in financial inclusion: a person may have a borrowing history without having a credit profile that enables access to larger formal facilities.

Borrowers often use several sources of credit for different needs. A farmer may rely on a bank, a digital lender, a Sacco or informal financing, depending on the amount required and the repayment terms available. Research reported by TechTrendsKE from a Central Bank of Kenya survey found that farmers’ borrowing was spread across banks, digital credit, family and friends, and other sources, while only a small share of the sampled group used Hustler Fund.

That fragmented borrowing landscape helps explain the government’s interest in alternative data. A record held by one lender may show only part of a customer’s financial behaviour. A wider credit profile could potentially make that customer more visible to banks and other formal lenders.

However, higher Hustler Fund limits and access to formal credit are separate outcomes. A borrower may qualify for a larger digital loan without necessarily gaining access to affordable business financing, a bank facility or a sustainable path out of short-term borrowing. The government’s stated graduation objective will therefore depend on whether the system helps customers obtain credit suited to their income, business activity and repayment capacity.

Data governance will determine who benefits

The proposed framework also raises questions about how financial information will be shared and used. If borrowing records from banks, Saccos, mobile lenders and other institutions are incorporated into credit assessments, borrowers will need to know what information is being used, which institutions can access it and how decisions based on that data can be challenged.

The issue is particularly relevant because Hustler Fund is a publicly backed lending programme whose infrastructure and data may have commercial value beyond the Fund itself. The KCB example shows how the system’s technology and behavioural information can support private-sector lending, but the proposed framework will need to establish how access is governed and whether borrowers benefit from greater competition and better credit options.

The Fund’s own repayment and financial sustainability questions make data quality equally important. The government has said that the programme’s revolving capital can support continued lending, while recovery efforts remain necessary for unpaid loans. A broader credit system will need reliable records and clear processes for handling inaccurate, incomplete or disputed information if it is to support fair lending decisions.

The proposed pilot is therefore about more than assigning higher limits. It is an attempt to build a credit-information system that can connect government-backed digital lending with the wider financial sector. Its success will depend on whether better information helps borrowers move from repeated small loans into larger, affordable and productive financing, while preserving transparency and control over their financial data.

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