HUSTLERS’ FUND: A DISRUPTIVE MODEL IN THE FINANCIAL CONTEXT IN KENYA: REVIEW OF LITERATURE

Abstract

Micro, small, and medium-sized enterprises are regarded as a crucial component of economic growth, therefore, they are acknowledged as essential generators of productivity, employment, and innovation. Although MSMEs have received a lot of attention recently, many of them fail to live long to celebrate their first birthday while others stagnate in growth. This could be attributed to many factors key among them lack of finances due to lack of collaterals and high interest rate. The Kenyan Government in December 2022 launched MSMEs fund commonly known as ‘Hustler fund’ which is a disruptive financial innovation model that is changing the financial and scape in in Kenya. However, scanty research has been done on the implication of financial innovation in Kenyan context. The purpose of this study was to investigate the effect of Hustler fund on the Kenyan financial sector. The study was grounded on the following theories: resource-based theory, constraint-induced financial theory, financial inclusion theory, and disruptive innovation theory. Exploratory research design was used and data was collected through literature analysis of the available documents. The study found out that hustler fund is a disruptive innovation model in the financial sector due to its low interest rate, lack of requirement of clearance from Credit reference bureau and absence of threats. Hence the other players in the financial sector in order to remain competitive and relevant they should develop strategies aimed at financial deepening by making loans affordable to most Kenyans and with improved ease of access.