President William Ruto has announced that the government has removed seven million Kenyans who were blacklisted at the Credit Reference Bureau (CRB), in a bid to encourage Kenyans to borrow. This comes as the government announced a raft of changes to the Hustler Fund.
Speaking on Monday night during a town hall meeting at the Kenyatta International Convention Center (KICC), the Head of State, for the second time in a year and a half, announced that the government had removed more Kenyans from the blacklist.
“I can say today, with confidence, that the seven million Kenyans who had been blacklisted under the CRB echo system have been removed,” asserted Ruto. According to the President, a majority of Kenyans who had been blacklisted had borrowed Ksh100 to Ksh2,000 and failed to repay the loans in time.
At the same time, Ruto announced that more than two million borrowers on the state-run Hustler Fund would increase their borrowing limit by as much as 300 per cent. The government will also increase their repayment period by more than double following the launch of a new product aimed at graduating them to the formal credit market.
Ruto unveiled the new borrowing product, dubbed Bridge Loan. Beneficiaries of the loan product will access up to three times their current credit limit at an unchanged annual rate of eight percent. The repayment period will be extended to 30 days from 14 days, based on a new credit scoring system with nine categories.
According to Ruto, borrowers of the Bridge loan will also be given a month-long rollover period at an enhanced interest rate of 9.5 per cent.
Those who have consistently borrowed and repaid on time have been assigned a credit score of A1 or excellent, while the worst score for defaulters is C3, which denotes the worst creditworthiness on the platform. The nine bands are A1, A2, A3, B1, B2, B3, C1, C2, and C3, and the government will use them to demonstrate a borrower’s creditworthiness.
"Over the last two years, we have assessed all the borrowers on the Hustler Fund, and today we can—with data, information, and credible understanding—assign every borrower a score that will now be the next collateral for them to borrow money within the ecosystem of the Hustler Fund," Ruto asserted.
He added, "I want to ask banks and financial institutions to look at the Hustler Fund repayment records. We will work with them so that, using our credit scoring mechanism, we can know the good borrowers and they can lend them money as we go into the future."
A total of Ksh60.5 billion has been handed out to some 24.7 million borrowers since the Fund was rolled out in late November 2022, according to Ruto.
The repayment rate is estimated at 79.50 per cent, or Ksh48.1 billion, while more than Ksh12.4 billion has been defaulted. Ruto revealed that eight million people are borrowing regularly from the fund, while two million of these, are very good borrowers, repaying the loans on time.
Savings stood at Ksh3.5 billion following the launch of the product in November 2023 following a restructuring that made it compulsory for borrowers to save five percent of their loan.
However, the Head of State hopes that the new loan facility will encourage more Kenyans to become consistent in repayments of their loans to qualify for the Bridge loan.
