The loan which ranges between KSh 500 and KSH 50,000 will be capped at 14 days in a plan that looks set to open a window for small businesses to access cheaper credit.
Speaking during the official launch, the Head of State urged borrowers to utilize the kitty well adding that those who will default will have to face penalties.
Some of the penalties defaulters will see their increased interest rate adjusted to 9.5% per annum 15 days after the date of default.
Further, persistent default spanning 30 days and over will see a customer lose their existing credit score and their account frozen.
“After more than 30 days of default, the borrower loses all the credit scores accumulated, and the Hustler Fund account is frozen,” the president said.
Ruto said loan defaulters will not be listed on CRBs, as they will have another chance of borrowing again.
But speaking during an interview with Citizen TV on Thursday, December 1, Nairobi Senator Edwin Sifuna encouraged Kenyans not to fear going for the loan.
The ODM senator said the scheme launched by the president has no legal recourse for the government of the day to go for the defaulters.
“I encourage Kenyans to take the hustler fund money because there is no legal recourse for the government to come after them because of not paying back,” Sifuna said.
As of Thursday, December 1, more than 1.4 million Kenyans had borrowed up to half a billion.
In a statement, Cooperatives and MSMEs Cabinet Secretary Simon Chelugui further disclosed that 1.14 million Kenyans had so far been registered in the kitty.