Introduction: When it comes to financing Micro and Small Enterprises (MSEs) in Kenya, one name stands out above the rest – the Hustler Fund. According to the latest findings from the Finaccess MSE Tracker Survey for August 2023, MSEs are increasingly turning to innovative financing solutions, with the Hustler Fund taking the top spot as their preferred choice. In this article, we’ll dive into the survey’s intriguing insights and discover why the Hustler Fund is winning the hearts of entrepreneurs across the country.
Hustler Fund: The Top Choice for MSEs In a financial landscape traditionally dominated by savings and loans from friends and family, Kenyan businesses are now embracing new, alternative sources of funding. Among entrepreneurs who reported having active loans at the time of the survey, a significant 45% had turned to the Hustler Fund for their financial needs. This was followed by 28% who relied on mobile banking platforms such as Mshwari and KCB M-Pesa, and 23.7% who borrowed from chamas or community groups.
High Awareness and Usage The Hustler Fund has left a lasting impression on Kenyan entrepreneurs, with an astonishing 95.1% of respondents, including those with both active and closed businesses, expressing awareness of this financing powerhouse.
Who’s Borrowing from the Hustler Fund? Notably, more male entrepreneurs are benefiting from the Hustler Fund compared to their female counterparts. The primary reason for borrowing from this fund was to meet personal or household expenses, a choice made by 18.1% of respondents. Additionally, many entrepreneurs turned to the Hustler Fund to secure working capital, a crucial component for business operations.
Advantages of the Hustler Fund Entrepreneurs have spoken, and they’ve highlighted the ease of access as the primary advantage of the Hustler Fund over other credit providers. However, 71.0% of respondents suggested that increasing the loan size would be a welcome move, ensuring that the fund better caters to the diverse needs of borrowers.
Challenges with Digital Credit Providers While digital credit providers like the Hustler Fund offer convenience, more than half of the respondents voiced concerns about high interest rates and short repayment periods when borrowing from these providers.
Challenges Faced by Female-Owned MSEs The survey also shed light on some challenges faced by female-owned businesses. A significant number of them were not operational during the survey period, with many located in rural areas and owned by individuals under the age of 36. Working capital shortages were identified as the primary reason for business closures, with 46.1% attributing their struggles to this issue. Interestingly, 58.8% of closed businesses had tried, unsuccessfully, to secure capital from various sources.
Perceptions About Business Prospects Finally, the survey revealed that entrepreneurs were divided in their outlook on business prospects. Approximately 50.6% expected their businesses to perform better in the coming year, although this figure marked a slight decrease from the 58.3% reported in October 2022. Conversely, the proportion of businesses anticipating a decline in performance increased from 22.6% in October 2022 to 27.3% in June 2023.
Survey Background The tracker surveys were conducted by a team of experts from the Central Bank of Kenya (CBK), in partnership with the Kenya National Bureau of Statistics (KNBS) and the Financial Sector Deepening Trust (FSD) Kenya. These surveys aim to provide critical insights into the dynamics of Kenya’s entrepreneurial landscape and its evolving financial needs.
In conclusion, the Hustler Fund’s rise as the leading MSE financing option in Kenya reflects the changing financial landscape in the country. As MSEs continue to seek flexible and accessible funding sources, the Hustler Fund’s popularity is set to grow, potentially shaping the future of entrepreneurship in Kenya.
