At least 800,000 Kenyans are behind payment of the Hustler fund loans. This is according to Cabinet Secretary Ministry of Co-Operatives and ...
At least 800,000 Kenyans are behind payment of the Hustler fund loans. This is according to Cabinet Secretary Ministry of Co-Operatives and Micro, Small and Medium Enterprises (MSMEs) Development Simon Chelugui.
The CS said out of the 15 million Kenyans that have borrowed hustler fund loan, at least 800,000 are struggling to repay.
Chelugui however said the government is proud of the strides the initiative has made and that the credit facility has made it possible to have Sh22 billion in circulation countrywide.
“The fact that we are moving from fixed security to credit score is an indicator of the success of this initiative. The fact that there is Sh22 billion in circulation is an indicator of the success of this initiative,” Chelugui said.
He said the Government is targeting to shift the approach to credit in Kenya from security based to credit score based.
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Chelugui added that the government is showcasing its collaboration with private sector to deliver the hustler fund which is a Government initiative.
"We don’t have a mobile network of our own, we don’t have our own banks, we work with private banks, we work with mobile networks but the source of the money, the initiative, the planning, the budgeting is all done by the Government. Our role as the Government is to oversee," Chelugui said.
He noted that 18 million Kenyans have so far enrolled with the hustler fund and that three million have not yet borrowed any money from the hustler fund.
The Hustler Fund is specifically designed to support small-scale traders in the country. It comprises four products: personal, micro business, SME and start-up loans. To access the fund, Kenyans can dial *254# on their mobile phones.
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President William Ruto, while launching the Hustler Fund, warned borrowers against defaulting with the State issuing strict measures to curb the same.
Those who default on the loans will see their interest rates increase from 8 per cent to 9.5 per cent. If a borrowers will not have paid the loans within the required time, they will be added an extra 15 days, before the increment of the interest rate.
The borrowers who default will also have their Hustler Fund account frozen.
"After more than 30 days of default, the borrower loses all the credit scores accumulated and the Hustler Fund account is frozen," he said.
However, President Ruto said loan defaulters will not be listed on CRBs, as they will have another chance of reborrowing.
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