Your savings will be seized in case you default on the Hustler Fund loan, the strict repayment terms and conditions for the fund’s savings and loan product indicates.

Also, the government has signaled that it will deploy debt collectors to pursue nonpayers, a warning that a number of defaulters are set for property seizures.

What happens if you don’t pay on time?

In the event of default (non-payment within 14 days from the date of disbursement), interest will accrue at the rate of 9.5% with effect from the 15th day. And if you fail to repay by the 30th day from the date of disbursement, your credit rating may be reviewed by the bank which may result in an evaluation of assigned credit limit.

The Fund’s savings and loan product are being administered by KCB Bank Kenya and Family Bank.

The interest applied on the loan will continue to accrue on a daily basis from the date of loan disbursement until the 365th day (1 year), or until when the loan is fully paid.

And in case, you fail to repay the loan by the 30th day from the date of disbursement, you will not be eligible to borrow from the fund until full repayment of all outstanding amounts.

“And as a way of mitigating the risk of total default by a borrower, the bank will retain the 30% intended for short-term savings, until full repayment of the loan. And, upon, full repayment of the loan, the amount will be released to the customer who will be at liberty to withdraw or keep it as savings,” the terms and conditions relating to the Hustler Fund savings and loan product read in part.

The fund

The Hustler Fund is a digital financial inclusion initiative designed to improve financial access to responsible finance for personal, micro, small and medium-sized enterprises (MSMEs).

The fund is a creation of the draft Public Finance Management (Financial Inclusion Fund) Regulations, 2022, with a vision of helping improve financial access and reducing poverty.

The fund works in two ways – by providing a digital platform where people find the best deals on financial products, and by developing a series of digital tools and resources to help people understand and manage their finances better.

This fund is accessible through the USSD *254# or via the mobile App platform of any of the mobile network operators – Safaricom, Airtel, and Telkom.

The four products available under this fund are personal finance (KSh500 to KSh50,000 depending on individual scoring), micro loans, SME loans, and startup loans. The government launched the first installment of this fund (the personal finance product) on November 30.

The Personal Finance Product

The personal finance product has an interest rate of 8% per annum, prorated and the daily interest rate translates to around 0.022% and to be paid in 14 days.

“For instance, if you get a loan of KSh1,000, the interest for the 14 days will be KSh3.08. And so, you would repay KSh1,003.08 within the 14 days”.

The amount to borrow is based on previous performance and ratings.

The loan attracts a 5% mandatory saving, which is split into short-term (30%) and long-term (70%) – for (pension account).

“For instance, if you borrow KSh1,000, The 5% of KSh1,000 is KSh50. Of this KSh50, 30% which is equal to KSh15 will go to short-term savings and the other 70% or KSh35 will go to the pension savings account”.

The government will be matching the pension remittance of a customer who does not default on a loan in the ratio of 2:1 such that for every KSh2 saved, the government will add KSh1 to a maximum government contribution of KSh6,000 per annum.


The saving method is a good idea as it comes with an interest rate of 9% annually which is higher than interest on loans.


Currently, there are no clear guidelines on how to access the pension including defining the age or the duration at which this can be accessed.