Ruto announces updated Hustler Fund loan terms

President William Ruto on Monday announced updated lending terms of the Financial Inclusion Fund, the government-run credit facility commonly known as the Hustler Fund.

Borrowers under the ‘bridge’ product get a term loan of 30 days from the current 14 days on the personal loan, with a rollover of 30 days at eight per cent annually and a one-month roll with enhanced interest at 9.5 per cent.

Speaking during the Hustler Fund’s second-anniversary celebrations at the KICC in Nairobi, Ruto said the enhanced loan limit depends on the credit score, with some borrowers getting triple or double their current limits.

“The beneficiaries will establish a relationship with the banks to start gaining the banking experience and credit history to inform their bankability. Limit refresh will be dependent on the Hustler Fund behavioural credit rating of the individual as they transact,” he said.

The Hustler Fund has been offering loans from a minimum of Ksh.500 to as high as Ksh.50,000 at an eight per cent pro-rated basis or a daily rate of 0.002 per cent.

The score has nine bands: A1, A2, A3, B1, B2, B3, C1, C2, and C3 and the government will it use to demonstrate a borrower’s creditworthiness.

“Over two million Hustler Fund beneficiaries have demonstrated good borrowing behaviour over the last two years and their positive behaviour will earn them access to enhanced credit loans,” said Ruto adding that the fund has recorded over seven million repeat borrowers so far.

Ruto added borrowers will also be able to use the Hustler Fund credit score when seeking loans from banks and other lending institutions.

Launched on November 30, 2022, the Hustler Fund targets Kenyans who could not access credit, having been blacklisted by various credit rating agencies.

Under the fund, five per cent of every loan is directed towards savings; 70 per cent to long-term and 30 per cent to short-term savings.

At the start of October, Hustler Fund loans totalling over Ksh.57.8 billion had been disbursed, according to the Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development.

But only Ksh.45.5 billion had been repaid, with the fund’s boss, Elizabeth Nkuku, telling Parliament the government was mulling forceful recovery of monies owed.