NAIROBI, Kenya, Nov 30 – Shortly after President William Ruto launched the Hustlers Fund on Wednesday, he went ahead to register by dialing *254#, whereupon he received a message indicating that his loan limit is Sh2,200.
Deputy President Rigathi Gachagua and Prime Cabinet Secretary Musalia Mudavadi who joined the President on the podium also checked their loan limit which was capped at Sh1,600 and Sh2,800 respectively.
The President however defended the given small loan limit, saying he held several meetings with mobile network providers CEOs who briefed him that most blacklisted customers are on CRB because of debts ranging as low as from Sh500.
He said fintech lenders also gave a similar narrative, that on average 80 percent of borrowing on any lending platform is between Sh100 and Sh2,000.
“If 80 percent of all these lending platforms are lending between sh 500 and sh 1,000, that tells you how important the sh 500 or sh 1000 is,” the President stated.
In addition, the President said that 80 percent of the 15 million Kenyans who are on have a debt of between Sh500 and Sh1,000.
“If you thought Sh500 or Sh1,000 is nothing you should begin to think how can it then keep people on CRB if it was nothing,” he added.
The Head of State said that those who are managing the platform informed him that there are 600 requests per second.
On his part, DP Gachagua told off Hustler Fund critics that “You may think that between Sh500 and Sh50,000 is little money but it’s not to millions of Kenyans. Wale watu wa familia kubwa nyinyi mwende kwa banki kubwa mchukua pesa huko mlipe 14 percent.”
Kenyans will only need to dial *254#, to access Hustlers Fund starting tomorrow, following its official launch by President William Ruto on Wednesday.
To be eligible for the fund, one must be a Kenyan citizen aged 18 years and above, with a valid Identification Card and Registered Mobile number with mobile network providers like Safaricom, Airtel and Telkom.
One will also be required to have a mobile money account that is either Mpesa, Airtel Money or Tkash, and the sim card must have been in use for more than 90 days.
The Hustlers Fund identifier is the ID number, hence one customer can not use more than one number to borrow.
Additionally, savings are secure even if a mobile device is lost because the Hustler Fund account is PIN-protected. Once the SIM card is replaced, access to the account will be restored.
The fund, launched on Wednesday, will offer four different products: start-up loans, micro-loans, SME loans, and personal loans.
With a 14-day repayment period and an annual interest rate of eight percent calculated per day, a customer who borrows Sh500 will pay back Sh501.53 after 14 days, representing Sh1.53 in interest.
When a customer borrows, the approved loan is sent to their mobile money account, deposits 95 per cent of it in their money wallet, and places 5 percent of it in their savings account.
The five per cent that goes toward the savings plan is split into 30 per cent for short-term savings and 70 per cent for long-term (pension) savings.
If the loan is not paid back within 14 days, the customer’s credit rating is affected, and they are given an additional 15 days. If the loan is still not paid back, the interest rate increases to 9.5% per year.
The Hustler Fund account is frozen and the borrower loses all accumulated credit scores after more than 30 days of default.
There will be no Credit Reference Bureau listing in case the loan is defaulted, hence this default will not affect the person’s credit rating with other creditors.
