The government has begun sending notices to individuals who have defaulted on Hustler Fund loan for more than 12 months, asking them to repay or face penalties.
This comes amid concerns of a high default rate among borrowers – which the Treasury put at 27% last year, with unpaid loans amounting to Sh9.9 billion as of October 2023.
“Dear customer, your Hustler Fund loan has been overdue for more than a year… Repay to avoid extra charges and improve your limit,” reads the notice dispatched to borrowers.
The government is taking a cue from digital lenders and telcos by implementing daily charges to compel borrowers to make their payments.
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The Hustler Fund is a digital financial inclusion initiative designed to improve access to financial services for individuals and small and medium enterprises through mobile money service platforms.
The fund was launched in November 2022 by President William Ruto as part of his election manifesto to provide financial help to boost low-income groups.
It facilitates issuance of loans of between Sh500, and Sh50,000 to individuals for a tenure of 14 days at an interest rate of 8 per cent per year.
The Hustler Fund for individual borrowers was launched by Dr. Ruto on November 30, 2022, while the fund for businesses with facilities between Sh10,000 and Sh20,000 was rolled out in March 2023.
Data from the Hustler Fund website indicates that 23,293 individuals have accessed Sh52.94 billion, while 53,724 groups have taken up Sh179.29 million.
– By Ann Precious Kinyua
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