President William Ruto has announced a lifeline for four million Kenyans who have defaulted on Hustler Fund loans, offering them a chance to triple their borrowing limit if they clear their outstanding amounts.
Speaking at a Town Hall meeting at the Kenyatta International Convention Centre (KICC) in Nairobi, Ruto noted that the defaulters either have overdue amounts or failed to repay on time.
“If they pay their outstanding amounts, the window for them to be moved to the Bridge Loan, which doubles or triples their credit limit, exists,” he stated. “The four million people out there who have not paid their money, they have a chance.”
The Bridge Loan product is specifically designed for borrowers who have demonstrated responsible borrowing behavior. It offers higher loan limits and a longer repayment period of 30 days, up from the current 14 days, with an interest rate starting at 8% per annum. Borrowers rolling over the loan for a second month will face an increased rate of 9.5%.
Ruto emphasized the government’s commitment to expanding financial access through the Hustler Fund.
“Once you pay, we are going to assess you for two months and then graduate you to the Bridge Loan,” the President said.
He also clarified that the Hustler Fund aims to rehabilitate borrowers’ credit ratings, removing penalties and blacklisting often associated with loan defaults.
Since its launch in 2022, the Hustler Fund has played a vital role in providing financial support to millions of Kenyans in low-income brackets. By August 2024, it had attracted approximately 21 million borrowers, accounting for 45% of active loans in the digital lending sector.
However, default rates have remained a challenge, with the government reporting about 13 million defaulters as of October 2024, owing a total of Sh7 billion. To address this, the government recently proposed a legal framework to recover defaulted loans by accessing funds directly from borrowers’ mobile money accounts, such as M-Pesa, or through mobile airtime deductions.
