The Hustler Fund: A Comedy of Errors

Hello 👋🏿 It's Brian from The Kenyan Wall Street

In today's newsletter, the Auditor General's Report shows that time travellers from up to 2073 and children took Hustlers' Fund loans, worth KSh 31 million. We break down this financial joke.

Also, read about the new bill that intends to tame gold smugglers. These and more business stories right here…

AUDITS  

The Hustler Fund : A Comedy of Errors

The Hustler Fund was meant to uplift small businesses, but right now, it’s just a masterclass in mismanagement. With sky-high defaults, missing money, and a leadership vacuum, it’s more of a financial thriller.

We analysed some of the concerns as follows :

1. The Repayment Riddle

Turns out, lending billions without a solid collection plan is a bad idea—who knew? A whopping 64% of the Hustler Fund’s loans (Ksh 8.74 billion) have been defaulted. With no real consequences for defaulters, the Fund is basically running like a charity system, which, surprise surprise, isn't working.

2. Who’s Minding the Money?

Managing loans without a dedicated system? Bold move. The Fund leans on banks and mobile operators to handle everything, but there’s no real tracking mechanism.

Worse still, someone thought it was a great idea to give out loans to infants—1,377 minors, including a 10-day-old baby, somehow got funded. Meanwhile, over 250,000 people with birth dates from the future (yes, 2073) also cashed in KSh 31 million. Time travel investments, perhaps? 🤔

With no clear audit trail, confused accounting, and a skeleton staff — it is unlikely that accountability will prevail soon…Here's more on this financial joke.

What I think :

🟢 Maybe the government will realize Hustler Fund was not a good idea from the beginning, and will halt it before it stinks any further.

🔴 The government will press its arrogance button and decide that pumping more money in a problem fixes a problem. It doesn't. But do your leaders know that?

Today's Poll

Yesterday's Poll Results

Which country in the East African Community do you think holds the destiny of the tourism sector in the next five years?

eCitizen Audit: Glitches, Gaps & Ghost Agreements

The Auditor-General is diving deep into eCitizen’s operations, uncovering security gaps, governance hiccups, and a lack of valid agreements with service providers—basically, a digital house with some shaky foundations. The platform relies too much on its vendor for updates, has no backup payment system for disasters, and seems to have misplaced its data protection compliance manual, with no proof of registration as a data controller or processor.

A financial review exposed discrepancies in commissions worth KSh 592 million. Meanwhile, KSh 857 million in user fees—meant for system maintenance—lacked a clear consultancy agreement with the vendor. Safaricom’s co-location deal expired on June 30, 2023, but nobody got around to renewing it — talk about an IT governance headache. Here's more.

What I think :

🟢 The Auditor-General’s findings present an opportunity to strengthen eCitizen by addressing governance, security, and financial gaps.

🔴 The report exposes serious weaknesses in eCitizen’s operations and poor IT governance. Just weeks ago, the Business Registration Service (BRS) was hacked. Not looking good!

CAPITAL MARKETS  

Amsons Bags Bamburi, NSE Says Goodbye

Bamburi Cement’s shares have been suspended from trading on the Nairobi Securities Exchange (NSE) following Amsons Industries’ successful acquisition of 96.54% of the company. Amsons will now proceed with a squeeze-out process to acquire the remaining 3.46% of shares, with trading expected to remain halted until May 9, 2025. The company had been listed on the NSE since 1970 and reached its highest trading price of KSh 250 in 2007 before closing at KSh 56.50 on February 26, 2024. Amsons surpassed the 75% ownership threshold, giving it the option to delist Bamburi Cement from the NSE, subject to regulatory approval. If delisted, it would mark the end of Bamburi Cement’s 55-year presence on the Nairobi bourse. Read more here.

What I think :

🟢 The acquisition by Amsons Industries could bring fresh investment and strategic direction, potentially improving Bamburi Cement’s operations and competitiveness.

🔴 The delisting would reduce investment options for retail investors and diminish liquidity in the Kenyan stock market, which is facing a listing drought.

PUBLIC POLICY

Kenya’s Gold: Regulate, Refine, Profit!

Kenya’s Parliament is considering a bill to regulate the gold industry by creating a gold processing corporation. The corporation will oversee refining, research, and accreditation while combating illegal mining. Lawmakers believe proper regulation could boost exports, foreign exchange, and economic growth. The bill also seeks to protect small-scale miners by lowering licensing costs and ensuring safer mining practices. If enacted, it will promote local gold processing and increase value addition for the country. Here is what the bill proposes.

What I think :

🟢 The Bill will undoubtedly be a step forward in regulating a sector that has proliferated with cartels and unsafe mineral practices. It might curb illegal outflows and pitfalls in revenue attainment.

🔴 Like many laws in Kenya, implementation is not an easy thing to achieve.

More Stories 

• Banking. The Commercial International Bank (CIB) and the Kenya Bankers Association (KBA) have announced a strategic collaboration to launch the latest cohort of the CIB East Africa Credit Analyst Program.

• Startups. The Africa Founders Ventures (AFV) — which operates as “54 Collective,” is set to wind down its venture studio operations, likely resulting in widespread layoffs. The decision follows the announcement that 54 Collective’s partnership with the Mastercard Foundation will end in April.

• Tech Companies. South Africa could require tech giants including Google, Meta, Microsoft, X, Tiktok and Open AI to pay a 5-10% digital advertising tariff or levy if they fail to implement proposed anti-competition remedies to their operations within 6 months.

• Real Estate. Why Diaspora investors have also found that cash flow yielding assets like apartments, which provide monthly rental income to the owner, are far easier to sell in case of an emergency than idle land. Andrew Barden analyses here.

Opinion

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▶️ On your watchlist

In this episode of ‘Investing like an executive,’ Our CEO, Andrew Barden speaks to Mary Njoki, CEO of Glasshouse PR on the state of PR in Africa in the age of AI.

Have a lovely evening