NAIROBI, Kenya January 4 – President William Ruto has urged Kenyans to ignore calls by Azimio leaders who want them to default on the Hustler Fund as he plans to unveil phase two.
The Head of State, who spoke during the first joint TV interview at State House said the fund has been hugely successful and is ready to move to the next phase.
“When we launched this fund, a lot of politicians told Kenyans to take the money and not repay back, telling them that it’s useless. But today the money that is being repaid is more than that being borrowed,” the President said.
He told Kenyans to “ignore those leaders telling you to take the money and default on repayment because they themselves are paying their loans in Parliament.”
The Sh50 billion Fund launched on November 30 charges borrowers 8 per cent interest per annum but Kenyans cannot borrow more than Sh2500 to ensure it benefits more people.
“I can tell you today that this fund is self-sustaining because it’s addressing a need,” he said.
As of Wednesday, Ruto said 17.5 million Kenyans had registered for the Fund, and Sh12 billion was borrowed.
“Ignore anyone telling you that this fund is not working, I can tell you that we have 5 million repeat borrowers and Sh700 million in savings made so far in the fund and this is just the first month.”
“The fund is currently sustaining itself, Kenyans ignored those politicians. Those politicians pay their loans in Parliament and they are busy telling Kenyans not to pay back their loans,” Ruto said.
President Ruto said the government will embark on a credit scoring of Kenyans enrolled on the fund at the end of his month so as to guide it on how much loan to approve to the borrower.
Getting the amount is dependent on the borrower’s credit score, such that individuals with poor credit scores will be charged higher interest, plus possible penalties.
The government deducts 5 percent of every amount borrowed from the fund and saves it on behalf of the borrower.
“For those who will have borrowed Sh500 and successfully paid back, we will tell them because you have paid back in time for three or four times. We will increase your borrowing amount to Sh 1000 because we want to increase the borrowing amount to Sh50, 000,” Ruto said.
The loan limits for individuals from the fund were set at a minimum of Sh500 and a maximum of Sh50, 000.
The Head Of State pointed out that in February the government will launch the Phase Two of the Fund which will cater for Sacco’s and other small institutions
The second phase to give Kenyans in finance groups an equal opportunity to borrow at a small interest to boost their businesses.
The fund is expected to have a total of four products: Personal Finance (which has already been launched), Micro-Loan, SME Loan and Start-Up Loan.
To be eligible, one must be at least 18 years old, have a national identity card and a registered SIM card and mobile money account with Safaricom, Airtel or Telkom.
