Charles Gitonga
Thursday December 1, 2022
Kenya’s President William Ruto has has unveiled a government loan scheme targeted at the youth and small businesses in the country.
Dubbed Hustler Fund it aims to provide cheaper loans to informal business owners.
It will give personal loans of between $4 (£3) and $400m (£330m) through phones, with a repayment period of 14 days.
Borrowers will access the money by dialling a USSD code or using an application on their mobile phones.
An annual interest of 8% calculated per day will be charged, and borrowers will not need to provide any assets as security.
“It is 500 times cheaper than the average lender in the market,” President Ruto said during the launch.According to the government plan, 5% of the loan amount will be directed to a savings scheme, as it seeks to boost the level of savings in the country.
In the recent past, President Ruto has decried high interest rates charged by banks and mobile phone lending companies calling them exploitive.
The fund was a key campaign promise by the president who came to power in September.
He has touted the fund, which targets more than eight million people, as one that will give a lifeline to youth, women and low income groups who cannot access loans from commercial lenders.
At the launch event Mr Ruto, government ministers and corporate leaders from banks and telecom companies interacted with small business owners such as visual artists, fishmongers, and fashion designers who sold their wares to them.