Equity To Boost Ruto’s Hustler Fund With Additional Ksh.250 Billion

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Equity To Boost Hustler Fund With Additional Ksh.250 Billion

Equity Group says it will offer larger ticket loans to borrowers who are successfully onboarded to the Hustler Fund.

The planned facility would align with Equity Group’s renewed goal of disbursing more loans to the private

 sector on the backdrop of the general economic lift after the filtering through of COVID-19 effects.

Equity says it is considering setting aside up to Ksh.250 billion for on-lending to boost the government’s financial

 inclusion fund, popularly referred to as the Hustler Fund.

In the plan, Equity Group says it will offer larger ticket loans to borrowers

 who are successfully onboarded to the Hustler Fund, and who show proof of their ability to meet payments.

“We have offered to scale the Hustler Fund by fivefold to Ksh.250 billion. When one pays (the Hustler Fund loan) two times,

we will graduate them to Equity lending and have a loan limit at Ksh.150,000,” said Equity Group Managing Director Dr. James Mwangi.

The planned facility would align with Equity Group’s renewed goal of disbursing more loans to the private

 sector on the backdrop of the general economic lift after the filtering through of COVID-19 effects.

The lender, who posted a Ksh.33.4 billion net profit in nine months to September on Tuesday,

has begun offloading its holdings of government securities to disburse more loans to businesses and households.

Equity Group’s loan book grew by 21 per cent in the period to hit Ksh.673.9 billion.

The lender’s government security in the period was only up by a mere one per cent at Ksh.366.5 billion.

Dr. Mwangi has credited the Hustler Fund intentions including the creation of a savings mechanism and the de-risking of borrowers through graduated loan limits and credit scoring.

“For the first time, the government has a fund that brings financial discipline and more importantly, the component that excites us is the savings component,” he added.

The government is set to launch the first phase of the Hustler Fund on Wednesday next week with the initial disbursement

 of Ksh.50 billion targeted at individuals with the loan limit set at between Ksh.500 and Ksh.50,000.

The loan will attract an interest rate of eight per cent per annum on a pro-rata basis.

The tenure of the loans has been set at 14 days while the government is expected to

 shave five per cent of the disbursement and channel them to the borrower’s savings under their NSSF account.

Future phases of the Hustler Fund are expected to have larger ticket sizes and will be targeted to Small and Medium

 Enterprises (SMEs), larger enterprises, Saccos, chamas and other groups.

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