A World’s First? Kenya’s USSD-Powered Government ‘Hustler Fund’ Loan Program Kicks Off

Just 24 hours after it was launched, the Kenya government’s Hustler Fund sent over 413 million Ksh ($3.3 million) in loans while receiving Ksh 7.7 million ($62,805) in repayments.

On December 1 2022, Cooperatives and MSMEs Cabinet Secretary, Simon Chelugui, said 1.14 million Kenyans had fully registered to access loans and saving opportunities on the platform said to be available to all Kenyans above 18.

Kenyans can access the fund via USSD by dialing *254# from any of the country’s three mobile phone network providers. It is also possible to apply for a loan through the mobile applications of the three telcos.

The Hustler fund is a signature campaign promise by Kenya’s President, Willliam Ruto, who launched the fund’s first product on 30th November 2022.

“The Hustler Fund will help small business owners, liberate ordinary Kenyans from shylocks and help establish a culture of saving, investment, and social security. We will unshackle millions of Kenyans from the chains of debts that they are unable to pay,” said Ruto at the launch ceremony.

In addition to a personal finance product, the government intends to launch 3 more products from the fund:

• Microloans
• Small and medium-sized enterprises (SMEs) loans
• Start-up loans

Here are more details about the Hustler Fund:

• The repayment period for loans for small businesses through the Hustler Fund will be capped at 14 days and loans start at a minimum of Sh500 (limit) while the largest amount advanced will be Sh50,000 at an annualized interest rate of 8%
• If a customer borrows Sh500 ($4.08) they will pay back Sh501.53 ($4.09) after 14 days, representing Sh1.53 in interest. At eight percent per month, the interest is lower than the latest average bank borrowing cost of 12.38%
• The fund totaling over $407 million will see customers who have not refunded the facility in 14 days get an extra 15 days to repay and if the loan is still not settled, the interest rate increases to 9.5% per year
• Hustler loan defaulters will not be listed by credit reference bureaus (CRBs) ensuring their default on the Hustler Fund won’t impact their credit score with other lenders
• The fund is part of a plan to attract more savings from the Kenyan people. When a customer borrows, the approved loan is sent to their mobile money account; 95% is sent to their mobile money wallet, while 5% is sent to a savings account
• The 5% that goes toward the savings plan is split into 30% for short-term savings and 70% for long-term (pension) savings