Four million Hustler Fund defaulters to unlock higher loans if they clear debt
By Maureen Kinyanjui |
The President noted that repaying overdue amounts is key to unlocking enhanced benefits under the newly introduced Bridge Loan programme.
Four million Kenyans with outstanding Hustler Fund loans have an opportunity to access significantly higher credit limits if they clear their debts, President William Ruto has said.
Speaking during a Town Hall meeting at the Kenyatta International Convention Centre (KICC) in Nairobi on Monday evening, the President noted that repaying overdue amounts is key to unlocking enhanced benefits under the newly introduced Bridge Loan programme.
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"If they pay their outstanding amounts, the window for them to be moved to the Bridge Loan, which doubles or triples their credit limit, exists. The four million people out there who have not paid their money, they have a chance," Ruto said.
The Bridge Loan product, designed to reward borrowers with good repayment behaviour, offers an extended loan term of 30 days up from the standard 14 days with interest rates starting at 8 per cent per annum.
Those rolling over the loan for an additional month will incur a slightly higher interest rate of 9.5 per cent.
President Ruto highlighted that the initiative aligns with the government's broader goal of fostering financial inclusivity and supporting low-income earners.
"Once you pay, we are going to assess you for two months and then graduate you to the Bridge Loan," he explained.
The Hustler Fund, launched in 2022, has been instrumental in providing financial support to millions of Kenyans.
By August 2024, it boasted approximately 21 million borrowers, holding a dominant 45 per cent share of active loans in the digital lending market.
However, the fund has faced challenges with defaulting borrowers. As of October 2024, the government sought to recover Sh7 billion from around 13 million defaulters.
Proposed recovery measures include deducting funds directly from borrowers' mobile money accounts and airtime balances.
Despite these hurdles, the government remains optimistic about the fund's impact and aims to incentivize repayments instead of penalising borrowers.
"This intervention seeks to remove the penalisation, the blacklisting, the condemnation of people, and give them a chance to improve their credit rating," Ruto said.
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