Saturday, March 11, 2023 – Co-operatives and SMEs Cabinet Secretary Simon Chelugui has sought to explain why the government decided to charge interest on Hustler Fund, despite President William Ruto’s promise to offer interest-free loans.
Speaking during an interview, Chelugui explained that the Fund needed to sustain itself as any other moneylender, banks, and Saccos included.
“The fund is a plan by the government to help the citizens, but it must support itself. That is why we charge interest. Money deducted aids us to cater for some expenses from the companies offering the service,” he argued.
“We have lowered the interest and had to bargain with the companies to offer the services to us at a lower cost,” Chelugui added.
The loan repayment period is capped at 14 days with an interest of 8 per cent per annum or 0.02 per cent per day.
Furthermore, Chelugui pointed out that the government gives Kenyans ample time to repay the loans.
“I urge Kenyans to bear with us. We must have structures to ensure that the fund does not collapse. The 14-day repayment period gives Kenyans in business time to buy their products, sell, make a profit, and repay the loan,” he remarked.
His answer was in response to a clarification sought, in line with the government charging interest for Ksh500 borrowed from the Hustler Fund.
Chelugui was also asked to explain why the fund limits were not increased despite the shilling losing its value.
The CS argued that the depreciation of money was a global challenge. He pinpointed the inflation rate and other activities happening worldwide – an increase in fuel prices and the Russian invasion of Ukraine.
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