The financial inclusion fund, popularly known as the Hustlers Fund, will be disbursed through an online platform, President William Ruto has confirmed.
Speaking during the fourth Kenya Kwanza Parliamentary Group (PG) meeting on Wednesday, the president said committees will not be needed to regulate the disbursement process.
“The product is going to be seamless, you will not need any committee, you do not need to know anybody and the product will be online just like M-Pesa. I know some of you had made arrangements to form a committee for disbursing Hustler funds. Sorry I will disappoint you there will be no Hustler Fund committee,” the President said.
The Head of State said he has already initiated discussions with Mobile Network Operators (MNOs) and service providers to develop the online platform.
“We are working with our MNOs and technology providers and all the mobile operators including Safaricom, Airtel, Telcom, and others and that is the platform this money is going to be disbursed,” said Ruto.
“Have no doubt that nobody will be left behind. We have also made it possible to borrow using an ordinary phone where we have a USSD code where people can easily access it.”
Ruto also said the Hustlers’ Fund will first be availed to individual borrowers then Saccos, SMEs, and eventually to the big corporate borrowers.
The President assured that the necessary resources have been made available for the Hustler Fund takeoff.
Additionally, Hustler Fund borrowers will not be required to have collateral to obtain a loan.
Borrowers who default on loans will not be negatively listed with Credit Reference Bureau (CRBs) as the government moves to enforce credit scores as the measure of borrower’s credit worthiness.
“We are moving away from the CRBs and collaterals and we will be basing disbursements on the character of borrowers. The more we can formalise the customers’ behaviour the more we can graduate them to higher loan limits,” Samuel Keria, a member of a task force reviewing the regulations said on Wednesday.
The National Treasury noted the Hustler Fund will largely mimic those disbursed from digital/mobile applications where a borrower is locked to a lower limit of funds before they can qualify for higher loan values.
“The first phase of the fund will be targeted at individuals devolved in the Counties. The medium-term plan is to graduate the limit to about Ksh.500,000 to cater for medium-sized businesses. In the long-term, the maximum loan limit is likely to average Ksh.3 million for larger enterprises,” said Keria.
The first phase of the Fund will be launched on November 30 with loan limits capped at Ksh.50,000 based on each borrower’s credit score.