- The Huslter Fund loan repayment period has been extended to 30 days from 14 days.
- President Ruto announced two major improvements to the Fund: Hustler Fund Credit Rating System & Bridge Loan Product
- A credit score and borrower rating system has been introduced to track credit elegibility.
- The Fund has benefited 24.7 million Kenyans since its launch two years ago, with Ksh60 billion in disbursement.
Hustler Fund marked its second anniversary since it’s launch in November 2022—one of the very first projects President Ruto delivered under his campaign manifesto in one month in the office. He presided over the second hustler fund anniversary at the KICC, where he announced the various enhancements to the credit system to ensure progressive loan limits to the committed borrowers henceforth.
The head of state announced the creation of the Hustler Fund behavioral credit rating system, aimed at tracking positive usability to enhance credit accessibility to borrowers who repay their loans within 14 days.
The Hustler Fund credit rating system operates on a set of metrical behavioral criteria, which places the loan beneficiaries on a score ranging from A1 (very good) to C3 (very poor). The system will allocate the borrowers on nine different bands: (A1, A2, A3), (B1, B2, B3), & (C1, C2, C3). This will dictate who gets less and more, as some could even tripple their limits in the long run.
“We are assigning a credit score to every borrower so that this becomes their new collateral,” President Ruto said.
He also launched the Bridge Loan product, enabling borrowers with outsanding credit scores to access higher loan limits and enjoy a longer repayment period. The bridge loan product is also set to expose the committed borrowers to the mainstreem financing sector, allowing versetile accessibility to the banking environment.
“Good borrowers will be able to triple their credit limits. Those who are at Ksh50,000 will now be able to borrow up to Ksh150,000, while those at Ksh5,000 will move to 15,000 and so on,” he added.
In a bid to crack down on the high default rate, the president urged banks and other microfinancing institutions to use the credit score rating system to analyze the loan eligibility of their customers, especially those who have benefitted from the Hustler Fund.
Additionally, the repayment period has been extended from 14 days to 30 days, which is a considerable amount of time to repay back the fund. However, the interest rate remains unchanged at 8% per cent a year.
The president also revealed that the Huslter Fund has benefitted at least 24.7 million Kenyans from the total disbursement of Ksh60 billion since it’s establishment in the last two years. Borrowers have been able to a cumulative Ksh3.4 billlion as per the mandatory 5% cut per borrowing. 70% were recorded in the long-term savings, while 30% went to short-term savings.
Going forward, the long-term Hustler Fund savings will be managed by the Kenya National Entrepreneurs Savings Trust (KNEST), a government pension scheme for Kenyans in the informal sector, the president said.
Hitherto, the fund had disbursed approximately Ksh 57.8 billion to around 24 million Kenyans at the start of the 4th quarter of 2024. However, the default rate has been plundering, with a substantial portion of this amount unpaid—approximately Ksh 10 billion, representing 27% of all disbursements. Roughly 19 million borowers have defaulted on their Hustler Fund.
The Hustler Fund acting CEO, Elizabeth Nkukuu, had devised plans and measures to ensure that all borrowed moneys are recovered, including plans to directly access M-Pesa accounts of defaulters to recover Ksh 7 billion owed by around 13 million individuals.
They are mostly people who borrowed in the first and second months, and the default amount is about Ksh billion. The beauty of this fund is that we have the phone numbers and the unique identifiers of the defaulters, the ationla ID. They are people of means; they are people who just don’t want to repay,” Nkukuu told the House in October 2024.
The move has since raised concerns pertaining to privacy issues.
