President William Ruto revealed that 7 million Kenyans previously blacklisted by the Credit Reference Bureau (CRB) have been cleared. This bold decision is aimed at easing access to credit for those who had small, unpaid loans, thus encouraging borrowing and economic growth. The majority of those removed from the blacklist had defaulted on small loans, ranging from Ksh100 to Ksh2,000.
Along with this announcement, Ruto unveiled significant changes to the Hustler Fund, a government initiative designed to help low-income earners access loans. The new reforms include raising the borrowing limit for over two million borrowers by up to 300% and extending the repayment period from 14 to 30 days, providing much-needed flexibility.
A standout feature of the new changes is the introduction of the “Bridge Loan” product. This loan allows borrowers to access up to three times their current limit, with an unchanged annual interest rate of 8%. Additionally, those who need more time can roll over their loans for another month at a slightly higher interest rate of 9.5%. This initiative aims to guide borrowers into more formal credit systems and improve their creditworthiness.
As part of the overhaul, the government also introduced a new credit scoring system. Borrowers will be ranked from A1 (excellent) to C3 (poor), allowing financial institutions to more easily assess their creditworthiness. Those with consistent repayments will be rewarded with better access to credit, encouraging responsible borrowing behavior.
Since the Hustler Fund’s launch in late 2022, it has disbursed over Ksh60 billion to nearly 25 million borrowers. With this new approach, the government hopes to improve repayment rates and create a more inclusive financial system, benefiting millions of Kenyans and boosting the economy.
By Nairobi