How to determine your own Hustler Fund loan amount
With the much-hyped Hustler Fund kitty formally launched, what many Kenyans will be interested to know is how a registered borrower can be able to determine how much can be availed to them to borrow.
Prior to and during the launch, it was reiterated that borrowers would be able to access loan amounts of between Sh500 and Sh50,000. Borrowers will also be required to repay this loan within 14 days at an interest rate of 8 per cent.
A borrower’s loan amount will subsequently be determined by one’s credit worthiness upon further interaction with the Hustler Fund lending facility.
Last week, the National Treasury explained that loans will be disbursed to borrowers based on their behavior of borrowing and repaying loans.
“We will be basing disbursements on the character of borrowers. The more we can formalize the customers’ behavior, the more we can graduate them to higher loan limits,” said Samuel Keria, a taskforce member reviewing Hustlers Fund regulations.
Credit worthiness, according to Forbes, is basically how lenders determine if a borrower is worthy of being given credit (loan).
“A creditworthy borrower is one who is able and responsible enough to repay their debts in a timely manner. If a lender believes you are a risky borrower, it’s unlikely that you will qualify for new credit.” Forbes reported in 2021.
To become credit worthy, a borrower should have a steady monthly income that would allow them to pay their debts.
“Lenders use your income and debt to calculate your debt-to-income (DTI) ratio. Your DTI measures the percentage of your monthly income that’s claimed by your debt obligations; the lower your DTI, the more creditworthy you appear,” Forbes further reported.
President William Ruto is also on record for saying that the Hustler Fund will use credit scores to determine if a borrower is worth giving a loan to. A high credit score reveals that a borrower can be able to borrow loans and repay them on time- and makes a person more credit worthy. The vice-versa also applies.
In reference to Mr Keria’s earlier stated sentiments, the more credit worthy a person is, the higher the loan limit will increase.
“The first phase of the fund will be targeted at individuals devolved in the Counties. The medium-term plan is to graduate the limit to about Sh500,000 to cater for medium-sized businesses. In the long-term, the maximum loan limit is likely to average Ksh.3 million for larger enterprises,” Mr Keria said.