In the vibrant landscape of Kenya’s economy, a powerful financial tool has emerged to uplift the informal sector, which forms the backbone of the nation’s workforce and contributes significantly to its Gross Domestic Product (GDP).
The Financial Inclusion Fund, popularly known as the Hustler Fund, has been established by the government to provide a safety net for those at the bottom of the economic pyramid. This innovative initiative aims to offer holistic financial solutions, ensuring access to credit, savings, insurance, housing, market linkages, and financial literacy.
The Hustler Fund Group Loan product is a groundbreaking addition under the umbrella of the Financial Inclusion Fund. This transformative fund is designed to provide accessible and responsible finance to individuals, micro, small, and medium-sized enterprises (MSMEs) across Kenya. By targeting registered groups such as chamas, associations, and Saccos under the Micro and Small Enterprises Authority (MSEA), the group loan product aims to bridge the gap between entrepreneurs and much-needed capital, driving collective-driven competitive market enterprise.
At the heart of the Hustler Fund Group Loan product lies the empowerment of entrepreneurial endeavors. This product allows eligible groups to apply for loans ranging from Kes 20,000 to Kes 1 million, with a nominal interest rate of 7% per annum on reducing balance and a 1.5% default rate. Repayment is structured over a six-month period from the date of disbursement, offering flexibility through both installments and lump-sum options.
The unique aspect of the group loan product is its emphasis on collective strength. A mandatory savings component of 5% of the approved amount encourages a collaborative savings scheme among group members, further fostering a sense of financial responsibility and cooperation.
To qualify for this empowering financial boost, groups need a minimum of ten members and an active registration certificate from the Micro and Small Enterprises Authority (MSEA).
Accessing the Hustler Fund Group Loan product is remarkably user-friendly. A simple dial of *254# across any mobile network or the use of a mobile app is all it takes. Applicants need to be Kenyan citizens, possess a mobile money wallet, and be above 18 years of age. The absence of collateral or guarantors streamlines the application process, making it accessible to a wider range of aspiring entrepreneurs.
The benefits of the Hustler Fund Group Loan product extend across various sectors, including agriculture, trade, manufacturing, services, and technology. Entrepreneurs can utilize this financial boost to expand their businesses, amplify their earnings, create job opportunities, and enhance their overall quality of life.
To access this empowering resource, individuals, and groups need to follow ten straightforward steps:
- Create a Group: Form a group of at least 10 members, including 3 officials who can initiate the process.
- Add Officials: The officials who created the group add 2 more officials to help manage and oversee group activities.
- Add Members: Officials then add other members to the group, expanding the collective strength.
- Accept Group Invite: Invited members and officials need to accept the group invite to activate it and begin the loan application process.
- Complete Group Creation: One of the officials finalizes the group creation process. At this stage, the group must have a minimum of 10 members, including 3 officials. Members will receive a notification about the group’s limit.
- Request Loan: Only officials can request a loan on behalf of the group. This request requires approval from 5 random members (3 members and 2 officials).
- Approval of Loan Request: The loan request needs to be approved by the specified number of random members and officials to proceed to the next step.
- Transfer of Funds: An official initiates the transfer of funds. To proceed, this transfer must be approved by 3 random members and 2 officials.
- Approval Transfer of Funds: Similar to the previous step, the transfer of funds requires approval from 5 random members (3 members and 2 officials).
- Repayment of Loan: Any member of the group can repay the loan either partially or in full, completing the loan cycle.
Borrowers can opt to repay in installments or lump sums. The loan also requires a saving of 5% of the approved amount, which is channeled towards the group members’ savings scheme.
