Kenyans Are Yet To Repay 75% Of Hustler Fund

Kenyans are yet to repay nearly three-quarters of Hustlers fund defying the fund’s repayment terms.

Cooperatives and Micro, Small and Medium Enterprises Cabinet Secretary Simon Chelugui said Kenyans have only repaid 2.64 billion shillings out of the 9.58 billion shillings the government had disbursed in 19 days after the launch.

Some 59.3 percent of the loans had been repaid by December 14, when the loans issued on the first day of the launch were due.

The fund, launched on November 30^th by president William Ruto, will see individual borrowers get between 500 shillings and 50,000 shillings at an annual interest of 8.0 percent. Borrowers who have not repaid the loan in 14 days will get an extra 15 days to repay before incurring an annual interest rate of up to 9.5 percent after persistent default spanning 30 days.

According to Chelugui, the largest loan issued to a borrower so far is 5,000 shillings. Some 16.59 million Kenyans have subscribed to the fund while 2.69 million customers have already borrowed more than once, underlining Kenyans’ preference for low-interest loans compared to bank borrowing cost of 12.38 percent and annualized M-Shwari charges of 108 percent.

Nairobi hosts the highest number of subscribers to the fund at 1.4 million and the amount of money they have borrowed so far is 1.14 billion shillings. Kiambu takes the second position at 651 million shillings while Nakuru borrowers have taken 454 million shillings and those in Machakos have taken 354 million shillings.

Youths aged between 18-29 years account for the highest number of borrowing at 33 percent. Those between 30-39 account for 30 percent, 40-49 (19 percent), 50-59 (10 percent), and 60-69 (5 percent), while 2 percent are above 69 years.

The government is set to launch another Hustler fund product in February next year which will allow businesses to borrow between 100,000 shillings and 2.5 million shillings. The money will be disbursed through chamas, banks, Saccos, and microfinance institutions.

During the launch of the 50 billion shillings fund, the head of State said the government will launch another product in April targeted at Saccos that will allow them to borrow from 10 million shillings to 100 million shillings. The said product will be regulated by the Sacco Regulatory Authority (SASRA).

Related Content: How To Apply For The Hustler Fund On Your Phone