Pay up or face the music: State’s stern warning to Hustler Fund defaulters
The government has stepped up efforts to recover billions of shillings in loans to Kenyans under the Hustler Fund amid spiralling defaults under the scheme that was launched last year.
Borrowers who have defaulted for over a year have been receiving notices to repay or face fines as the State acts to cut the size of unpaid loans, which stood at Sh9.9 billion as of October last year.
President William Ruto launched the Hustler Fund in November 2022 as part of his election manifesto to uplift low-income groups.
The fund issues loans of between Sh500 and Sh50,000 to individuals for a tenure of 14 days at an interest rate of eight per cent per year. A high default rate, which the National Treasury put at 27 per cent last year is the main headache bedeviling the fund and, which has put its sustainability into doubt.
“Dear customer, your Hustler Fund loan has been overdue for more than a year… Repay to avoid extra charges and improve your limit,” the State says in notices to borrowers.
The daily charges and when they will come into force remain as the State moves in to replicate similar moves used by digital and telcos to compel borrowers to pay defaulted loans.
Besides, daily charges, digital lenders and telcos also go after borrowers who have defaulted on repayment of their loans. A check on the fund’s website shows that 23,293,402 individual borrowers have tapped Sh52.94 billion and a further Sh179.29 million has been disbursed to 53,724 groups.
The fund issued Sh465 million in loans to 809,351 Kenyans who were not in the system, exposing flaws in the administration of the kitty. In March last year, Dr Ruto launched the Hustler Fund for businesses, popular as chamas (table banking groups), with facilities of between Sh10,000 and Sh200,00.