President William Ruto's Council of Economic Advisors Chair, David Ndii, says the government borrows Sh25 billion every Thursday.
Speaking during an interview on Citizen TV on Tuesday, February 14, Ndii said part of the money is used to power government expenditure by lending to Kenyans at a rate of eight (8) per cent.
"The government has the capacity to go to the market and borrow from banks at a rate of eight per cent but the bank will not lend to the poor people," said Ndii.
Ndii said a similar model is applied to the Hustler Fund where the government borrows from banks and lends to Kenyans at the same interest rate of 8 per cent that the bank charges the government.
He said the borrowing cost is passed on to Kenyans.
"We pass at exactly the same cost the government is borrowing at for the Hustler Fund" he added.
Ndii said the fund is solely run by players in the private sector.
"The Hustler Fund is run by the private sector, we have no access to it and no public official has access to the Hustler Fund; it is fully automated. It is run by a private sector, run by an engine provided by the telcos. The money stays with a custodian in a bank," he said.
Hustler Fund is part of President William Ruto's campaign promises to Kenyans launched in November 2022.
Its objective is to help entrepreneurial individuals unlock their doors to investments.
The fund is accessible through the USSD code *254# and mobile application platforms of any of the mobile network operators in Kenya.
Under personal finance, a borrower can for the moment access between Sh500 and Ksh.50, 000. Their qualification will grow by borrowing more and repaying within the allowed time of 14 days. The applicable interest rate is 8 percent per annum, calculated per day.
This means that if a borrower borrows Sh1, 000, they will be charged interest of Sh3.60 should they repay on the 14th day. That comes to Sh153 interest for a loan of Sh50, 000 that must be repaid in two weeks.
To qualify, a borrower needs to be at least 18 years old and have a Kenyan identity card.