According to the latest Micro and Small Enterprises (MSE) Tracker Survey conducted in August 2023, almost 45% of MSEs borrowed from the Hustler Fund. The survey revealed that 95.1% of MSE owners were aware of the government-funded Hustler Fund, which was introduced last year. Among those who borrowed from the fund, 18.1% borrowed purely for business operations, with 74.3% using the funds to boost their working capital, and 22.0% using the funds to expand their businesses.
The survey also indicated that 68.6% of those who borrowed from the Hustler Fund used the money for personal and household purposes, while 13.3% borrowed for both business and personal reasons. The overall borrowing from the fund was reported at 51.3%, with more male-owned businesses borrowing from the fund than female-owned businesses. The primary reason given for borrowing from the fund was to meet daily expenses.
In June 2023, the uptake of mobile banking loans by MSEs reduced to 28.0% from 57.2% in October 2022. However, the uptake of mobile money overdrafts such as Fuliza and loans from banks/microfinance banks increased significantly over the same period. Borrowing from banks and microfinance institutions increased from 6.4% in October 2022 to 15.9% in June 2023.
The survey also revealed that 56.3% of MSEs had existing business loans as of June 2023, up from 55.0% in October 2022. In June 2023, 59.0% of MSEs borrowed to purchase stock/supplies, compared to 51.6% in October 2022. Most customers still use cash while transacting with MSEs, with the use of cash as a mode of payment at 98.5%.
Digitalization of business enterprises plays a critical role in improving operational efficiency, the safety of stock and sales, and eases decision-making. The survey indicates that the proportion of MSEs that use digital channels increased, including the use of mobile money, digital bank transfers, and credit and debit cards. The proportion of MSEs using at least one digital channel in business transactions increased from 73.5% in October 2022 to 85.6% in June 2023. This trend was higher for female-owned, urban, and owner-operated businesses compared to male-owned, rural businesses with 1-9 employees.
