Treasury removes Sh50bn ceiling on Hustler Fund
Treasury removes the KSh50bn ceiling on Hustler Fund ahead of launch on November 30, 2022
Treasury removes the KSh50bn ceiling on Hustler Fund ahead of launch on November 30, 2022.
Prior to its launch on November 30, the Hustler Fund has undergone significant revisions from the National Treasury.
The National Assembly is given more authority over how the Hustler Fund is allocated and made available in the final Hustler Fund Regulations.
The National Assembly now has the authority to raise or lower the initial cap of Ksh50 billion on the primary amount.
The Prof Njuguna Ndung’u-led Treasury has done away with the Sh50 billion funding ceiling that had been prescribed in the draft regulations, leaving it to the discretion of the National Assembly to determine the maximum resources to be gobbled up by the fund.
The regulations are in Legal Notice 213 published by Prof Ndung’u, on November 23, 2022.
Section Six of the final Hustler Fund Regulations provides that “the capital of the Fund shall be as appropriated by the National Assembly or from any other source provided for under regulation 4 of these Regulations”.
This is a stark departure from the provision in the draft regulations which stated that “the maximum capital of the Fund to be appropriated by the National Assembly shall be 50 billion shillings”.
Another major change in the final Hustler Fund regulations is that persons who default on loans will be slapped with an interest rate 150 basis points higher (1.5 percent higher) than the standard interest rate of eight percent.
This means that those who default on loans from the Hustler Fund will pay an interest of 9.5 percent unlike the eight percent that will be the standard rate.
“The interest or administrative fee payable by a beneficiary on a financial service or product advanced under these regulations shall be at a maximum rate of eight per centum per annum on reducing balance provided that where a beneficiary defaults, the interest or administrative fee payable shall be nine and one half per centum on a reducing balance,” Section 22 of the final regulations states.
The final regulations have also widened the product array offered by the Hustler Fund to include retirement benefits. The draft regulations provided that the fund would offer credit, savings, insurance, and investment products.
Financial Inclusion Fund popularly known as Hustler Fund is one of Ruto’s key campaign promises and a key cog to implementing the Bottom-Up economic model.
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