Kenyans will from November 30, be able to borrow as low as Sh500 after the Hustler Funds programme is unveiled.
The maximum limit will be Sh50,000 as determined by the borrower's credit score.
The programme's establishment and implementation was approved on Tuesday by the Cabinet during its second meeting with President William Ruto.
The loan interest will be capped at 8 per cent per year and computed on a pro-rated basis.
Hustler Funds is the first single credit product in the country.
"The implementation of the Administration’s signature pledge is tipped to liberate the people of Kenya from the bond of predatory lending," the cabinet said.
During his inauguration, Ruto stated that the establishment of a Hustler Fund will provide cheap and easy loans to the wananchi.
"We shall implement the hustler fund dedicated to the capitalisation of micro, small and medium enterprises through chamas, saccos and cooperatives to make credit available on affordable terms that do not require unnecessary collateral,” he said.
Ruto said the Sh50 billion annual kitty will be channelled towards supporting micro, small and medium, enterprises (MSMEs).
The funds will be channelled through credit societies and investment groups.
The programme has been steered by regulators including the Central Bank of Kenya (CBK), Financial Intermediaries and Financial Institutions and Mobile Network Operators.