A Guide to Hustler Fund Loans: How to Apply and Repay in Kenya

For Kenya’s micro-entrepreneurs and informal sector workers, including boda boda drivers, mama mbogas, and small-scale traders, the Hustler Fund is a lifeline.

Launched in November 2022, this government-backed mobile loan program has empowered 24.6 million Kenyans by 2024 with affordable credit to grow their hustles.

With loan limits from KES 500 to 50,000 (and up to KES 1 million for Bridge Loans), low interest rates of 8–9.5% annually, and a simple USSD application (*254#), the Hustler Fund is redefining financial access.

But how do you apply, repay, and avoid the pitfalls that led to a 78% default rate (KES 10 billion unpaid in 2023)?

This guide breaks down eligibility, application steps, repayment terms, and tips to make the most of Hustler Fund loans, plus a success story to inspire you.

What Is the Hustler Fund?

The Hustler Fund is a Kenyan government initiative to provide affordable, collateral-free loans to individuals, SMEs, and chamas in the informal sector, where 80% of Kenya’s workforce operates.

Unlike private mobile loan apps like Tala (15–39% interest) or shylocks (20–100% monthly), the Hustler Fund offers:

Low rates: 8% annually (0.02% daily) for personal loans and 9.5% for late payments.
Loan types: Personal Loans (KES 500–50,000, 14 days), Biashara Loans (KES 10,000–200,000, 1–12 months), Group Loans (KES 50,000–1M, 30 days), and Bridge Loans (KES 100,000–1M, 30–60 days, launched December 2024).
Savings feature: 5% of each loan is saved (70% long-term, accessible post-60 years; 30% short-term, accessible after 15 days).
No CRB listing: Defaults only freeze your Hustler Fund account, not your credit score.

With 83% of Kenyans using digital financial services (CBK, Q1 2024), the Hustler Fund’s mobile-first approach via *254# or its mini-app makes it accessible to millions, especially in rural areas.

Why Hustler Fund Loans Are Popular

The Hustler Fund’s appeal lies in its simplicity and affordability, making it ideal for micro-entrepreneurs and informal workers like boda boda drivers or market vendors. Key benefits include:

Instant access: Funds disbursed to M-Pesa, Airtel Money, or T-Kash within minutes.
Low entry: Start with as little as KES 500, perfect for small-scale needs.
Financial inclusion: No collateral or CRB checks, helping the 19 million blacklisted borrowers.
Savings boost: 5% of each loan builds a nest egg, unlike private apps.

However, the 78% default rate highlights a challenge: 70% of borrowers used loans for consumption (e.g., food, betting) rather than business, per 2023 Business Daily reports. This guide will help you use and repay loans wisely.

Who Is Eligible for Hustler Fund Loans?

Eligibility is straightforward, designed for Kenya’s informal sector:

Age: 18+ years.
SIM Card: Active Safaricom, Airtel, or Telkom line for at least 90 days.
Registration: Must register with Hustler Fund via *254# or mini-app.
Additional Requirements:
- Personal Loans: Open to all registered users with a valid ID.
- Biashara Loans: Requires business registration (BRS) and KRA PIN.
- Group Loans: Chama must be registered with MSEA or BRS.
- Bridge Loans: Category A/B borrowers (70–100% on-time repayments).

Pro Tip: Borrow and repay small personal loans (e.g., KES 500) consistently to improve your credit rating and unlock higher limits or Bridge Loans.

How to Apply for Hustler Fund Loans

Applying is quick and mobile-friendly, taking less than five minutes. Follow these steps:

Dial *254#: Use your Safaricom, Airtel, or Telkom line.
Select Hustler Fund: Choose the loan option (Personal, Biashara, Group, or Bridge).
Register (First Time): Enter your ID number, confirm details, and set a PIN.
Request Loan: Select your desired amount within your approved limit (check via *254#).
Receive Funds: Funds are disbursed instantly to your M-Pesa, Airtel Money, or T-Kash wallet.

Alternative: Download the Hustler Fund mini-app (Google Play, Safaricom/Airtel/Telkom) for a user-friendly interface to apply, track limits, and manage repayments.

Note: For Biashara or Group Loans, submit registration documents via *254# or county offices. Bridge loans require a Category A/B rating, verifiable via the mini-app.

Repayment Terms and Penalties

Understanding repayment terms is crucial to avoid the fate of 19 million defaulters in 2023. Here’s how it works:

Personal Loans:
- Repayment Period: 14 days.
- Interest Rate: 8% annually (0.02% daily).
- Penalty: 9.5% annually for late payments.
- Savings: 5% of loan (e.g., KES 25 on KES 500) split 70% long-term, 30% short-term.
Biashara Loans:
- Repayment Period: 1–12 months.
- Interest Rate: 7% annually.
Group Loans:
- Repayment Period: 30 days.
- Interest Rate: 8% annually.
Bridge Loans:
- Repayment Period: 30–60 days.
- Interest Rate: 8–9.5% annually.

How to Repay:

Dial *254# or use the mini-app, select “Repay Loan,” and pay via M-Pesa, Airtel Money, or T-Kash.
Partial payments are allowed to reduce penalties (e.g., KES 100 on a KES 500 loan).
Early repayment (within 7–10 days) boosts your credit rating for higher limits.

Penalties for Default:

Account freeze until repayment.
Loss of access to higher loans (e.g., Bridge Loan eligibility).
No CRB listing, unlike private apps like Tala or Branch.

Pro Tip: Use budgeting apps like Money254 to allocate funds for repayments and avoid the 70% consumption trap.

Success Story: From Boda Boda to Fleet Owner

Meet Peter, a boda boda driver in Kisumu. In 2023, Peter applied for a KES 5,000 personal loan via *254# to buy spare parts for his motorcycle.

By repaying within 10 days, he increased his limit to KES 20,000 within three months. In 2025, as a Category A borrower, he accessed a KES 200,000 Bridge Loan to purchase a second motorcycle, hiring a rider and doubling his daily income to KES 3,000.

Peter’s 5% savings (KES 10,000) also grew, giving him a cushion for maintenance. “The Hustler Fund gave me a chance to dream bigger without shylock stress,” he says.

Tips to Make the Most of Hustler Fund Loans

To maximise benefits and avoid defaults, follow these strategies:

Start Small: Borrow KES 500–1,000 to test repayment and build your credit rating.
Use for Business: Invest in stock, equipment, or marketing, not consumption like betting (a key default cause).
Repay Early: Pay within 7–10 days to avoid 9.5% penalties and unlock higher limits.
Track Savings: Check your 5% savings balance via *254#; withdraw 30% short-term savings after 15 days for emergencies.
Budget Smartly: Pair loans with apps like Chumz to track expenses and ensure repayment funds.

Risks to Watch Out For

High Default Risk: 78% of borrowers defaulted in 2023, often due to misusing loans for non-income needs.
Account Freeze: Late payments lock you out of future loans until settled.
Limited Bridge Loan Access: Only Category A/B borrowers qualify, requiring consistent repayments.

Workaround: If repayment is tight, use partial payments via *254# to reduce penalties and maintain eligibility.

Why Hustler Fund Loans Are Here to Stay

With KES 997 million spent daily on mobile transactions in Kenya, the Hustler Fund’s mobile-first, low-cost loans are a cornerstone of financial inclusion.

Its 8–9.5% rates, no-CRB policy, and savings feature outshine private apps like Zenka (2.45–39%) and shylocks, making it a top choice for micro-entrepreneurs.

Whether you’re a market vendor restocking goods or a chama planning a group project, the Hustler Fund can fuel your hustle if used wisely.

Ready to start? Dial *254# or download the Hustler Fund mini-app to apply today. Share your Hustler Fund success story in the comments, and follow Fintech News for more tips on growing your business with mobile loans!

Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, and digital finance at Africa Digest News.