Nairobi Senator Edwin Sifuna has accused President William Ruto of duping Kenyans on the newly unveiled Hustler Fund during his campaigns.
President Ruto launched the fund on Wednesday to offer Kenyans loans from a minimum of Sh500 to as high as Sh50,000 at 8 per cent pro-rated basis or a daily rate of 0.002 per cent.
He hailed it as the key to unlocking the economic equality of all Kenyans.
But according to Senator Sifuna, the fund is not what Ruto promised Kenyans while wooing them for votes in his quest for the top seat ahead of the August General Election.
Speaking on Citizen TV’s Day Break show on Thursday, the senator said the head of state promised interest-free grants to small-scale traders, not loans.
“This is not what was promised during the campaign. During the campaign, the hustlers were told that they would be receiving a grant which would not be subject to any interest for them to support their businesses,” Sifuna said.
He likened it to the regular digital credit facilities such as Fuliza, the mobile lending program by telecommunications giant Safaricom.
“What was launched yesterday is essentially a government-run Fuliza that you can access and pay within 14 days,” said Sifuna.
The Senator further advised Kenyans not to shy away from taking up the loan over fears of failing to pay back, arguing that the government has no legal recourse to come after defaulters.
“I encourage Kenyans to take the Hustler Fund money because there’s no legal recourse for the government to come after them because of not paying back,” he noted.
With a 14-day repayment period and an annual interest rate of eight per cent calculated per day, a customer who borrows KES 500 will pay back KES 501.53 after 14 days, representing KES 1.53 in interest.
If the loan is not paid back within 14 days, the customer’s credit rating is affected, and they are given an additional 15 days.
If the loan is still not paid back, the interest rate increases to 9.5% per year.
The Hustler Fund account is frozen and the borrower loses all accumulated credit scores after more than 30 days of default.
There is also no CRB listing, so this default has no impact on the debtor’s credit score with other lenders.
The borrower who defaults may pay off the loan all at once or in installments, and after full repayment, they may borrow again.
