Billow Kerrow: Hustler Fund is nothing revolutionary, gov't is trying to compete with digital lenders

Former Mandera senator Billow Kerrow has downplayed Kenya Kwanza administration's Hustler Fund  which is set for launch on Wednesday.

The fund was Preident William Ruto's key pledge and is set to give reprieve to millions of Kenyans who could not access credit after being blacklisted by various credit rating agencies.

But according to Kerrow, the idea behind the fund, which he says should have been a grant, is nothing new.

Speaking on Wednesday during Citizen TV's Day Break program, the former parliamentarian said the fund is trying what local digital lenders such as Safaricom's Fuliza loans have been doing.

"As opposed to what Kenya Kwanza has been saying, there is nothing revolutionary about this fund. For the people we are targeting, those at the bottom of the pyramid, Fuliza and other digital credit providers are already doing it," Kerrow said.

While terming it a misplaced initiative, the former senator said the average Kenyan is not interested in long-term loans but "quick fixes" in their day-to-day small business activities.

"The people at that level are borrowing for three to four days, do business and return it. It's not a loan for a year. The average for Fuliza has not gone beyond 14 days, and we are talkign about 500-600 billion a year that is being borrowed," he said.

"The people borrowing are not looking at an annual loan. People are looking for money to buy something today, sell it tomorrow, return the loan and get another loan. These people can even take a Fuliza loan four times in a day," he added.

The Hustler Fund will offer Kenyans loans from as minimum as Ksh.500 to as high as Ksh.50,000 at 8 per cent pro-rated basis or a daily rate of 0.002 per cent.

Kerrow however noted that while the interest rates might be lower than those offered by most digital lenders, the fund is not appropriate for the people who the government is targeting. He cited ease of access as  one of the factors which might draw the initiative backwards over its competitors.

"The people are not looking at the annual aspect of it, but the urgency and the need, and that is why Fuliza is successful. The issue is not about the size of the loan, but that you are bringing a fund that is going to compete with an existing fund," he said.

"It is not going to be easy to compete with these other ones because of the simplicity of access to the fund," added Kerrow.