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A Central Bank of Kenya (CBK) survey has revealed that Kenyan farmers are increasingly favouring Fuliza and bank loans over the Hustler Fund for agricultural financing.
The survey, conducted from March to May 2025, suggests that most farmers prefer the accessibility and flexibility of digital loans like Fuliza and have since ditched the Hustler Fund, which aimed to provide low-interest loans (8% per annum) to support small businesses and farmers.
The survey focused on farmers’ credit access and usage patterns, including various financial sources, such as banks, microfinance institutions, digital loans (including Fuliza and KCB Mpesa), and informal channels.
Survey Findings
Findings from the survey show a dominant source (58%) and digital loans, including Fuliza, seeing a fourfold increase in usage (from 2% to 8%).
Credit usage rose to 64.0% of the population, indicating strong demand for loans, while savings rates declined to 68.1%, the first drop since 2009, suggesting potential financial stress or shifting priorities among Kenyans.
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Key Findings on Credit Sources
| CREDIT SOURCES | MARCH 2025 (%) | MAY 2025 (%) |
| Hustler Fund | 11 | 0 |
| Microfinance Institutions | 13 | 0 |
| Banks | 41 | 58 |
| Digital Loans (Fuliza, KCB Mpesa) | 2 | 8 |
| Buyers of Farm Produce | 11 | 16 |
| Informal Savings & Credit Groups | 9 | 16 |
| Saccos | 35 | 24 |
Loan Utilization Patterns
| LOAN USE | MARCH 2025 (%) | MAY 2025 (%) |
| Inputs (Fertiliser, Seeds, Pesticides) | 94 | 84 |
| Labour Costs | 62 | 57 |
| Equipment & Machinery | 25 | 41 |
The decline in usage for inputs and labour from may reflect seasonal variations, with a notable increase in equipment financing, possibly indicating longer-term investment needs.
Hustler Fund
The Hustler Fund, launched in 2022 by the Kenyan government, was designed to provide affordable credit with loans ranging from Kshh500 to Ksh50,000, a 14-day tenure, and an 8% annual interest rate.
Additionally, 5% of each loan is withheld as savings, with 70% allocated to long-term savings and the balance to short-term savings.
Despite these features, the fund has faced challenges, including high default rates, with reports indicating 13 million Kenyans owing Ksh7 billion and criticism from figures like Emurrua Dikir MP Johana Ngeno, who likened it to Fuliza due to repayment issues.
Rise of Fuliza and Bank Loans
Fuliza, offered by Safaricom, provides quick access to funds through M-Pesa, with daily interest rates (e.g., Ksh6 for loans between Ksh500–Ksh1,000), making it attractive for immediate needs like purchasing inputs or paying labour during planting seasons.
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The CBK survey’s increase in digital loan usage (8% by May 2025) suggests farmers value this flexibility, despite higher interest rates compared to the Hustler Fund’s 8% annual rate.
Bank loans, used by 58% of farmers by May 2025, offer larger loan amounts and longer repayment terms, catering to farmers’ needs for significant investments, such as equipment (41% usage by May).
The survey also noted that 54% of farmers previously cited high interest rates as a barrier to credit access, which may explain the shift to banks offering potentially more favourable terms.
The 2024 FinAccess Household Survey, which informs this CBK survey, reported that 28.9% of the adult population used the Hustler Fund in 2024, with 26.0% of those in agriculture-related activities utilizing it.
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