Hustler Fund uptake grows – Chelugui

Cooperatives and MSME Development Cabinet Secretary Simon Chelugui has described the uptake of the Hustler Fund, so far, as impressive saying Kenyans have embraced it wholeheartedly.

In particular, CS Chelugui said that he was impressed with the uptake noting that a total of Sh2.9 billion had been disbursed by 12pm Saturday.

According to the data that CS Chelugui released yesterday, 8.4 million Kenyans have registered themselves through the fund’s digital platforms including the dedicated USSD code *254#.

CS Chelugui said borrowers have so far repaid slightly over Sh129 million noting that Hustler Fund was progressing well and according to plan.

“Since yesterday (Saturday) at noon, Kenyans have borrowed Sh1 billion in 24 hours from the Hustler Fund. An additional 2.45 million Kenyans have opted to join Hustler Fund. This is basically 102,000 Kenyans per hour,” CS Chelugui said in his latest update.

“Hustler Fund has given 1.9 million loans in the last 24 hours, that is 1,333 transactions per minute, 22 loans per second,” he said.

“Importantly, the repayments have more than doubled since yesterday from Sh49 million at 9am yesterday to Sh129 million today at noon,” he stated.

The savings have also exponentially increased. Kenyans have saved Sh147 million translating to 5 per cent of the amounts borrowed so far, he said.

At the same time, CS Chelugui borrowers have so far saved 147 million adding that total transactions stands at 5 million.

Personal borrowing is the first product to be launched under the financial inclusion initiative, a key feature in President Ruto’s economic revival plan. 

The Head of State launched it at Green Park terminus in Nairobi last week.

The Hustler Fund comprises of four products: Personal, Micro Business, SME and Start Up loans.

Kenyans can access Hustler Fund, which ranges from Sh500 and Sh50,000 through the USSD code *254# on their phones.

Different products

The fund, launched last 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 per cent of it in their savings account.

The 5 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.

Credit rating

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 cent per year.

After this, 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.

The easy mobile-loan scheme that catapulted president William Ruto’s rise to power in Kenya only a few months ago has quickly turned into a lightning rod for data privacy concerns. The Hustler Fund is Ruto’s $410 million loan project meant to lift millions of Kenyans out of poverty through his bottom-up economic model. In a country where only 9 percent of the workforce has a stable income—39 percent of Kenyan youth are without jobs—such an offer carries huge potential.