Kenyans have been cautioned to be wary of communication inviting people to register for the Hustler fund on websites and mobile phones.
Cooperatives and Micro, Small and Medium Enterprises CS Simon Chelugui said members of the public should disregard all forms of communications as transactions will be done on a mobile phone.
“There will be no intermediaries for the personal finance product. It will just be the hustler and his or her phone. No registration is required, borrowers will only be required to dial a code,” said Chelugui.
The CS said the fund will become active on November 30 this year, when President Dr. William Ruto launches it officially.
He announced that the product that will be launched on November 30th is the Personal Finance Product, and that money available for lending is between Sh500 and Sh50,000.
Other products that will be launched at a later date that include Micro Loan, SMEs Loan and Start Ups Loan will require intermediaries.
The CS who was speaking during a press briefing at the Ministry’s headquarters at NSSF building in Nairobi, stated that borrowers will be required to repay in 14 days of which the 8 percent interest will be calculated pro-rata or on a daily basis.
“This fund is a saving component. Every time one borrows, 5 percent of the amount goes to a saving scheme where the money earns interest and for every Sh2 saved, the government adds Sh1,” stated Chelugui.
The CS at the same time dismissed media reports claiming that loan defaulters will be fined up to Sh10 million.
He clarified that penalties outlined in the regulations published by the National Treasury only targets fund officials who may embezzle or misappropriate the funds.
Chelugui said the Fund is working with the leading mobile network operators who include Safaricom, Airtel and Telkom to deliver the funds, besides setting up a joint call centre that will disseminate information and respond to issues and questions of borrowers.
The CS said his ministry has already established a technical committee to plan, design and implement the Fund’s products, adding the regulations that will guide the funds were taken for public participation.
The Hustler Fund is revolutionary, aimed at making affordable credit to sections of the population that have been left behind for too long. It is envisioned to boost national savings and promote the hustlers’ businesses.
The fund that will be paperless will not require guarantors and collateral as the money will be accessed on a mobile phone.
