Hustler Fund vs Uwezo Fund: Difference Between Loans Benefiting Kenyan Youth

  • A Collage of President William Ruto and retired president Uhuru Kenyatta
    A Collage of President William Ruto and retired president Uhuru Kenyatta
    Kenyans.co.ke
  • President William Ruto, on Tuesday, November 15, through a Cabinet despatch, revealed the terms and conditions of his flagship Hustler Fund programme. 

    The conditions for accessing, using and repaying the credit slightly differ from retired President Uhuru Kenyatta's Uwezo Fund. 

    Uwezo Fund is a Government empowerment Fund launched in February 2014 to empower Kenyans socially and economically. 

    There are several noticeable differences between the two funds, even though they both seek to address the same challenges Kenyan youths face. 

    President William Ruto arrives for second cabinet meeting at State House accompanied by Mining CS Salim Mvurya and Sports CS Ababu Namwamba on Tuesday, November 15, 2022
    President William Ruto arrives for second cabinet meeting at State House accompanied by Mining CS Salim Mvurya and Sports CS Ababu Namwamba on Tuesday, November 15, 2022
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    State House Kenya

    First, the Hustler Fund has three tiers of borrowing including Individuals, Chamas and Corporates while Uwezo Fund has two loan products called Wezesha Loan and Endeleza loan. 

    Wezesha loan targets first time-borrowers and allows people to borrow between Ksh50,000 and Ksh.100,000, while Endeleza targets repeat borrowers who are allowed to borrow up to Ksh500,000. 

    Speaking during a Kenya Kwanza Parliamentary Group meeting on Wednesday, November 16, President Ruto  indicated that the money available is Ksh500 to Ksh50,000 for personal loans and up to Ksh250,000 for chamas. 

    Hustler Fund will be available at an annual interest of 8.0 per cent, while Uwezo Fund is an interest-free loan product from the government. 

    The President explained that the interest is meant to ensure that the product is sustainable and available for the next person looking to borrow. 

    The Hustler fund also exhibits a self-sustainability component through its savings component announced by the president.

    "If you borrow Ksh1,000 from hustler fund,Ksh50 mandatory goes to your savings," the President indicated adding that the government estimates that it will save Ksh30 billion every year on Hustler Fund platform.

    "For every amount you save the government is going to match it 2 to 1 to ensure that the product is self-sustaining,"  the President told the lawmakers. 

    Another difference between Uwezo Fund and Hustler Fund is the penalties one is likely to be subjected to upon default. Misappropriation or failure to repay the Hustler Fund attracts a Ksh10 million fine or three years in prison. 

    Furthermore, since its inception in 2014, Uwezo Fund reported disbursing Ksh7.2 billion to over 75,000 groups across the country, while President Ruto has indicated that the government will make Ksh50 billion available for the Hustler Fund. 

    Unlike Uwezo Fund that requires applicants to submit physical forms while applying for the loan, Hustler Fund will be available digitally through an online portal. 

    However, the two funds have several similarities. For instance, both funds are founded on the concept of a bottom-up approach to economic empowerment. 

    Furthermore, both funds target women, youths and people from the low socioeconomic class in Kenya who must form groups to access the loans. 

    Finally, both programs are government loans that require the loanees to refund the money borrowed after a pre-agreed period. 

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    File image of government officials presenting Uwezo fund cheques to women and youth groups
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