• President Ruto has said that Hustler Fund loans will charge interest below 10 percent
• Previously while campaigning, he said that Hustler loans would be interest-free
President Ruto said over the weekend that the Sh50 billion Hustlers Fund will carry interest below 10 percent when it starts on December 1.
He has been accused of backtracking on his election promise of interest-free loans, although all the candidates were making wild promises.
Even if he has changed his mind now that he is President, it makes sense to charge interest on the Hustler loans.
The previous schemes like the Uwezo Fund, Youth Enterprise Fund and Women Enterprise Fund have been plagued by high levels of default.
In any case, getting a loan below 10 percent interest is normally impossible. Commercial banks charge at least 20 percent interest to individuals. Hustlers will be getting unsecured loans at barely above the rate of inflation.
But, as President Ruto said, the loans have to be repaid, they are not grants. That's why the loans will be made through saccos and the Co-op Bank where the beneficiaries are identified and come with guarantees from their fellow members. Repayments to saccos will provide a continual rolling fund for Hustler loans.
So this Hustler Fund is still a good deal, even if it is more realistic than some of its predecessors.
Quote of the day: "A certain amount of opposition is a great help to a man. Kites rise against, not with, the wind."
The American sociologist was born on October 19, 1895