A new proposal by the government could have far-reaching consequences for Hustler Fund defaulters, potentially affecting their ability to rent houses and access loans in the future. This proposal is part of a broader initiative to implement a credit score rating system, which aims to assess individuals’ eligibility for home ownership and financial services based on their track record of repaying borrowed funds.
No loans for Hustler Fund Defaulters
According to Elizabeth Nkuku, the Acting Chief Executive Officer of the Financial Inclusion Fund, the proposed credit score rating system will be a crucial tool in evaluating the creditworthiness of individuals, particularly those who have borrowed from the Hustler Fund. Nkuku emphasized that defaulters of Hustler Fund loans may face obstacles when trying to rent houses or secure loans from select financial institutions in the future.
“The goal is to create a scoring system that can provide insight into an individual’s financial responsibility. For example, if someone wants to rent a house, landlords can use this score to assess their reliability,” Nkuku explained during a recent media interview.
The government expects the credit score rating system to incentivize timely loan repayments by awarding points to borrowers who consistently meet their repayment obligations. This system may eventually eliminate the need for collateral when borrowing, making financial services more accessible to a wider range of individuals.
While the initial focus will be on reviewing Hustler Fund loan defaulters, the government plans to expand the credit scoring system to include borrowers from other lenders as well. This comprehensive approach aims to promote responsible borrowing and improve financial inclusivity across various sectors of the economy.
Govt’ to support SMEs
Despite these developments, the government remains committed to supporting micro-enterprises and grassroots initiatives. In the budget plan for the Financial Year 2024/2025, there are provisions to disburse more funds to groups such as Boda Boda Rider Saccos and Mama Mboga groups. This ongoing support reflects the government’s vision of empowering small businesses and fostering economic growth at the grassroots level.
Currently, the Hustler Fund boasts a repayment rate of 73 per cent, with over Ksh40 billion disbursed to borrowers. These figures highlight the impact of the fund in providing financial assistance to individuals and groups in need. As the credit score rating system takes shape, it could reshape the lending landscape, encouraging responsible financial behaviour and ensuring that funds are channelled to those who demonstrate creditworthiness.
