In a resolute declaration during his Jamhuri Day address, President William Ruto assured individuals who have invested in the one-year-old Hustler Fund that they will receive a lucrative interest rate of 12% on their savings by the end of this month. This announcement comes in the wake of the fund’s significant impact in addressing the market failure in providing affordable credit, particularly to those without access to collateral.
President Ruto, acknowledging the pressing demand for credit in the country, pledged to enhance the fund starting January next year. The envisioned improvements include the introduction of specific financial products tailored to augment enterprise and business facilities for existing mama mboga and boda boda saccos.
The interest rate of 12% offered by the Hustler Fund surpasses the average rates provided by most banks and Saccos, which typically range between five and 10 percent. This financial inclusion initiative has played a pivotal role in liberating five million Kenyans ensnared in the credit rating dilemma.
“The Hustler Fund has grown to become the largest financial inclusion programme in Kenya, disbursing Sh 42 billion to more than 21 million borrowers,” emphasized President Ruto. Borrowers on the platform have collectively saved Sh2 billion, boasting a commendable 75% repayment rate nationally.
Keeping his promise, President Ruto highlighted that credit limits for over 1.2 million borrowers have already been enhanced, with an investment of Sh500 million to match long-term savings on a ratio of Sh1 for every Sh2 saved. The platform currently boasts over 7.7 million regular borrowers, as per government data.
Despite the private sector and households facing increased exposure to costly loans due to the recent hike in the Central Bank of Kenya’s base lending rate, President Ruto expressed confidence in the stability of credit demand. The move is expected to result in higher interest rates for banks, potentially locking borrowers out of affordable credit amid tough economic times.
Addressing concerns about the rise in non-performing loans (NPLs), President Ruto underscored the government’s commitment to building a savings culture in Kenya. This commitment includes the implementation of a new NSSF contribution model, aiming to triple the fund’s value from Sh320 billion to over Sh1 trillion by 2027.
President Ruto’s emphasis on digitization and automation as key elements in improving NSSF benefit processing turnaround times signifies a broader effort to ensure transparent, efficient, and secure administration of all revenues and monies remitted by Kenyans. The adoption of digital technology and the migration of government revenue collection to a single paybill have not only increased total revenues collected but also eliminated leakages through corruption and theft.
As the government takes “strong measures” to promote integrity and efficiency in revenue management, the President directed all agencies to finalize their migration to the e-Citizen platform by the December 31 deadline.