President William Ruto during Madaraka day celebrations on Thursday launched the second phase of the Hustler Fund which targets small investment groups (Chamas) and Saccos.
The President unveiled the Hustler Chama Loan towards the end of his speech which will be delivered through cooperatives and groups to enable members to boost their businesses and improve living standards.
He said loans being given in this phase of the hustler programme range from Sh50,000 as the minimum amount and may grow up to Sh1 million.
Dr Ruto said loans would be based on the average credit score of each of the group members terming the first phase of the Hustler fund as revolutionary.
The President noted that close to 10 million Kenyans have been blacklisted by the credit reference Bureau, and were locked out of the borrowing system.
“On its way to becoming effectively the biggest financial institution by the number of borrowers, the hustler fund turned around the country’s fintech from predatory to responsive,” Ruto said.
He noted the Hustler fund had boosted the digital economy with Safaricom reporting close to 2Million new subscribers due to the fund.
“The Hustler fund has recorded 42.5 Million transactions through which 20.2 Million Kenyans have accessed nearly Sh30 billion and repaid close to Sh 20 billion with 7Million Kenyans constant customers,” he said.
The President defended the fund that no money had been lost and all Kenyans would access the service without any bribes or collateral.
In the second Phase of the Hustler fund, the government intends to offer funds to chamas and Saccos in an effort to overcome exclusion and barriers to participating in credit savings.
“We shall use policy and fintech to mainstream our way of life, and ensure that we all Kenyans are included in the entrepreneurial revolution,” he said.
He said the fund will offer loans to groups following the success of the Hustler Fund personal loan product.
“Your credit score will determine the amount you can access, and the amount you will continue to receive,” Dr Ruto said.
This comes barely a day after Small and Micro Enterprise (SME) Cabinet Secretary Simon Chelugui explained that the Hustler fund group loan would rely on the credit score of members.
Speaking earlier in the week during the just concluded Pre Madaraka Day Embu Expo, Chelugui said Kenyans should form 10-member groups using their mobile phones to access the funds.
“If you have a group of 10 members and seven of them are paying their loans on time we shall use their average score to determine their suitability to get a loan,” he said.
Chelugui explained that the investment groups would be assessed to establish if any of the members had defaulted in the initial Hustler Fund.
“This product will enable a subscriber to onboard 10 members using their mobile phones. They don’t have to travel for registration. Once 10 members have been listed, a survey will be carried out to establish if any of the members defaulted. They will be advised and once they clear their dues, they will access loans for their business,” said the CS.
He encouraged Kenyans to empower themselves by using the various affordable credit products offered by Kenya's Kwanza government.