Ruto Increases Hustler Fund Loan Limit By 3 Times, Gives Borrowers New Rules

The Head of State announced this during a presidential town hall dialogue on loans and job creation held at the Kenyatta International Convention Centre, KICC

Viral Tea Ke Writer Viral Tea Ke Writer
Dec 9, 2024 - 21:14 Updated: Dec 9, 2024 - 21:16
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Ruto Increases Hustler Fund Loan Limit By 3 Times, Gives Borrowers New Rules
President William Ruto speaking during the Hustler Fund’s second anniversary at the KICC, Nairobi on December 9, 2024. /PCS

President William Ruto on Monday, December 9 announced an increase in the Hustler Fund loan limit for more than two million borrowers. The Hustler Fund, administratively also known as the Financial Inclusion Fund, has had its borrowing limit increased in response to public demand.

The Head of State announced this during a presidential town hall dialogue on loans and job creation held at the Kenyatta International Convention Centre, KICC, explaining that many borrowers requested for their credit limit to be increased to enable them to borrow more as they had reached their borrowing limit.

“We have also launched a new product. The Bridging loan. It will allow every borrower in the Hustler Fund ecosystem, the good borrowers will be able to triple their credit borrowing. 

“Those with a limit of Ksh50,000 can now move to Ksh150,000 and those at Ksh5,000 will move to Ksh15,000. Some will be able to increase their limit because of their behaviour by 1.5 per cent, but others will not have any increase because they have not behaved well,” said the head of state.

President William Ruto being taken through how to access the Hustler Fund during its launch on November 30, 2022. /PCS

At the same time, he announced updated lending terms of the Hustler Fund, starting with the introduction of a new 'loan bridge' targeting ‘good borrowers’ who will now access enhanced credit limits, based on how good their credit history is.

Here, borrowers under the ‘bridge’ product get a term loan of 30 days from the current 14 days on the personal loan, with a rollover of 30 days at eight per cent annually and a one-month roll with enhanced interest at 9.5 per cent.

“The beneficiaries will establish a relationship with the banks to start gaining the banking experience and credit history to inform their bankability. Limit refresh will be dependent on the Hustler Fund behavioural credit rating of the individual as they transact,” he went on.

The Hustler Fund has been offering loans from a minimum of Ksh500 to as high as Ksh50,000 at an eight per cent pro-rated basis or a daily rate of 0.002 per cent.

At the same time, a Hustler Fund credit score has been introduced, ranging from A1 for ‘Excellent’ to C3 for ‘Poor’. This score has been grouped into nine bands: A1, A2, A3, B1, B2, B3, C1, C2, and C3, with the government set to use it to demonstrate a borrower’s creditworthiness.

“Over two million Hustler Fund beneficiaries have demonstrated good borrowing behaviour over the last two years and their positive behaviour will earn them access to enhanced credit loans,” said Ruto adding that the fund has recorded over seven million repeat borrowers so far.

Ruto added borrowers will also be able to use the Hustler Fund credit score when seeking loans from banks and other lending institutions.

The Hustler Fund was launched on November 30, 2022, targeting Kenyans who could not access credit, having been blacklisted by various credit rating agencies. Under the fund, five per cent of every loan is directed towards savings; 70 per cent to long-term and 30 per cent to short-term savings.

Back in September, the Cabinet approved the introduction of a third product of the Hustler Fund loan focusing on the Small and Medium Enterprises (SME) sector. This special loan was to target 2 million beneficiaries who have demonstrated a strong credit history with the Fund.

At the start of October, Hustler Fund loans totalling over Ksh57.8 billion had been disbursed, according to the Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development. However, only Ksh45.5 billion had been repaid.

Plans to forcefully recover the debt including using the names, amounts owed and telephone numbers of Kenyans who defaulted on Hustler Fund loans in recovering Ksh7 billion in unpaid loans from the Hustler Fund by all means were quelled by the government.

President William Ruto and CS Wycliffe Oparanya at the Mabole Primary School Grounds in Butere for the thanksgiving ceremony for the latter on August 24, 2024. /PCS

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