How beneficiaries will access loans
The Sh50 billion Hustler Fund that was launched by President William Ruto yesterday will enable individuals to access up to Sh50,000 through their mobile phones.
Speaking at the Green Park Terminal, the President said Kenyans can apply for the loans through the Unstructured Supplementary Service Data (USSD) code *254# that leads to the menu providing guidance on the application process for those with feature phones. A Hustler App for smartphone users will also be introduced.
He said the Hustler Fund will enable the common man who has no collateral, title deed, log book or guarantor to get low-interest loans to enable them to engage in business or take care of their personal needs.
To signal the high appetite for the Fund, the President said he had been informed that close to 100,000 Kenyans had already tried to access the funds even as the launch activities were going on.
The Fund has no profit, and that the government was now looking at how to sustain it. The fund will have an interest of eight per cent per year or 0.002 per cent per day, the lowest in the market so far.
“We have made interest 500 per cent lower than the average interest in the market. That interest is going to serve only two purposes: To make sure we can run the fund and to make sure that the fund is available and growing tomorrow to benefit the next person,” President Ruto said.
The President said the Fund will encourage the saving culture among Kenyans.
“We must bring the culture of saving into business so that as you do business, you are saving for tomorrow and the day to come.”
“We will consider the Government of Kenya as your employer. To the maximum of Sh6,000 per year, we will give you Sh3,000 per year to build a culture of savings. If all goes well, and even if we have five million people on the platform, we shall save at least Sh30 billion every year from those borrowing from the hustler fund,” the President said.
The Fund is composed of personal finance that was launched yesterday, micro-loans, loans for small and medium enterprises and credit for startups. Personal loan limits will be capped at a minimum of Sh500 and a maximum of Sh50,000, while credit limits for personal loans will be increased depending on a person’s credit rating.
Approved loans, which will be disbursed to a mobile account will attract an eight per cent per year interest rate computed on a pro-rated basis.
The President said the micro-loans, which will be launched in February next year will have a loan limit of Sh50,000 and ShSh500,000 which will be increased to Sh10 million after a successful trial.
“Because of that many Kenyans suffered because of shylocks who were asking for 10 per cent per day, or lenders at 1 per cent per day equivalent to 360 per cent per year. That is why we said we must have a product that has a friendly rate affordable to all Kenyans,” said the President.
He said the Hustler fund will replace the collateral system that has been built around title books, log books and securities.
“Today,we are starting the journey to build a collateral system that is built on credit scoring. That every citizen can grow their credit scores, they don’t have to own no titles, they don’t have to own log books, but can access credit if they work on their credit ratings,” he said.
“Today, I am happy that dream we gave Kenyans during the General Election campaign period will be realised today.”