Home General Government ‘Fuliza’? CS Chelugui outlines Hustler Fund details reminiscent of burdensome mobile loans

Government ‘Fuliza’? CS Chelugui outlines Hustler Fund details reminiscent of burdensome mobile loans

by kenya-tribune
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The Cabinet Secretary for Cooperatives and Micro Small and Medium Enterprises (MSMEs) Development, Simon Chelugui today outlined details of the much hyped Sh50billion Hustler Fund kitty reminiscent of the burdensome mobile loans.

Unlike the existing government owned Uwezo Fund which is interest free targeting women, youth and persons with disabilities, Hustler Fund kitty will attract an 8 per cent interest rate repayable 14 days calculated on pro-rata or on a daily basis.

Also, for Hustler Fund, the accessible amount is a minimum of Sh500 and a maximum of Sh50,000.

On the other, for Uwezo fund, the minimum qualifying amount is Sh50,000 and Sh500,000 is the maximum accessible amount.

“The Hustlers Fund is revolutionary as its objective is to make affordable credit to sections of the population that have been left behind for far too long… as a result, citizens will be able to start or boost their hustles without being crushed by predatory lenders, shylocks and over-the-roof interest rates.” Chelugui observed.

November 30. 200 is the slated date for official launch of the hustler kitty by President William Ruto.

The CS said his ministry has established a technical committee to plan, design and implement the Fund’s products to fit the campaign period promises following yesterdays’ publishing of the regulations that will govern the Fund by the National Treasury after a rigorous public participation process that ended a few days ago.

The kitty will be disbursed using existing mobile service providers with no intermediaries for individual loans.

“This will, of course, boost national savings and also provide those who borrow from the Hustlers Fund some cushion for a rainy day. Unlike many financial products that require a lot of paperwork, guarantors and collateral, among other hurdles, borrowers will face no such roadblocks. The finance will be accessed on a mobile phone,” said Chelugui.

A fully government credit funding initiative set to be launched in four phases starting with Personal Finance and subsequently followed by Micro Loan, SMEs Loan and finally Start Ups Loan.

The Personal Finance lending product ranging between Sh500 – Sh50,000 to be repaid in 14 days set to accrue 8 per cent interest will be calculated pro-rata or on a daily basis.

A 5 per cent of the amount goes to a saving scheme where the money earns interest every single time one borrows with a policy for every Sh2 saved, the government adds Sh1.

Chelugui said that the funds will be disbursed across through the already existing over 361 SACCO platforms.

He said funding is primarily a government intervention to be supported solely by the national budget as it seeks to catalyse and use credit scores unlike the previous listing on the Credit Reference Bureau (CRB) that have further left customers poorer.

“We wish to inform the public to disregard all forms of communication inviting them to register for the Fund on websites or phone numbers. No registration is required and all that will be required is to dial a code. There will be no intermediaries, it will just be the Hustler and his or her phone,” Chelugui stated.

The Fund is set to become active once the President launch it on November 30 as the CS asked publics to desist from alleged rumours being circulated that loan defaulters will be fined up to Sh10 million.

“There is no such thing. The penalties outlined in the regulations target Fund officials who may embezzle or misappropriate the funds.” Chelugui reiterated.

 

 

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