Hustler fund launched

[KenyanPlato]

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let now hope this capital revolution works. they should pumb 1 trillion to the poor and see what happens

[RV Pundit]

Without strong coupling with M-pesa like Fuliza it will fail; deduction should be automatic.

If they do it like Fuliza; it will be a revolution; as long as repayment is from your m-pesa balance; this will work.


- Basically make it Fuliza without expensive interest - then credit will become very cheap - 1 trillion will be easy target - gov can even borrow internationally at 5% if they can get such facilities - and dump it here.

- Allow for bigger loans.

Fuliza is growing crazy...
Comparatively, the service had 6.9 million distinct customers in the year ended in March 2022. Fuliza loan disbursements meanwhile grew by 30.1 per cent across the six months to Ksh. 315.6 billion from Ksh. 242.6 billion.

One million more Kenyans took Fuliza loans in the last 12 months, pushing disbursements from the overdraft facility to Ksh.502.6 billion.

[KenyanPlato]

this is going to be fuliza like facility. I thought it was confusing to lend average of 10k to 20k

Bure kabisa

Economic Maguire! They are everywhere! pic.twitter.com/dAtrkdqmm6

— Mohamed Wehliye, MBS (@WehliyeMohamed) December 1, 2022

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[RV Pundit]

Relax - M-pesa started like that - and you were all over dismissing it  -  Ruto has surpassed himself - rolling 50B loan like that cheaply is brilliant - I thought it would be usual corruption laden beaucratic process.

Fuliza do these micro-loans and they are approaching 5B dollars - that 20 percent of kenya revenues. 500 every 2 weeks is how many loans per annum? 500*30 - that everyone get 15,000 - if you enrol 10 million - that is a lot of money - 150B kshs - if average loan is 1000- that is 300B - if average loan is 1500 - that becomes 600B - and it money gov doesnt need to have - it's just rolling over the initial 50B - over and over - just injecting 50B every year to  smoothen repayment and savings.

This is how cba and safaricom are making a kill - using your money to roll it over and over - and declare a billion dollars profit annually

The revolutionary thing with hustler fund is the pension scheme - there is 401 inside it.

Instead of the profit going into Kenyatta empire - about 4% is going into pension scheme - where gov matches 2:1

Couple of years - everyone in kenya will have 401K - that is big enough to start good business or put deposit for a house.

So from 50B - this can be scaled up to 1 trillion shs easily - if donors, banks, and others cheap in - and put money into hustler fund.

Not only will people be rolling over micro-loans - but they will also slowly be building their pensions.

this is going to be fuliza like facility. I thought it was confusing to lend average of 10k to 20k

Bure kabisa

Economic Maguire! They are everywhere! pic.twitter.com/dAtrkdqmm6

— Mohamed Wehliye, MBS (@WehliyeMohamed) December 1, 2022

?t=b_6XJsNRlBz_Od1rCMaG2g&s=19

[Githunguri]

FULIZA loans stand at 1.7BN Kenya shillings daily....that's over 500BN annually.

Over the last 24HRS...Hustler fund has disbursed over 500MN and that number will keep growing.

People who are receiving these funds believe that it's a token for appreciation for voting Ruto and they are not bound to pay..infact I heard some people ask whether Ruto can jail 1MN Kenyans if they fail to pay and even if they get jailed whether goverment has enough funds to feed them in Kamiti prison.

The question is,How will GOK ensure that these loans are repaid?

[RV Pundit]

By tightly coupling it with mpesa which they already did;
That mean deduction can be made automatic after 14 days;
This privelege Fuliza enjoy;
They dont need to call you; they just deduct from M-pesa balance;
The same ought to happen; on the 14th day - whatever you have should be deducted;
Anyway as long as they are willing to learn and adapt based on the data;
They will adjust;

Great thing; Ruto is very open minded; and has no entrenched position on anything; whatever works

Hustler fund will be made to have highest priority on deduction because Ruto will want this to work;

Next is to weed out people who register with many lines; I dont know how they do this; but they are people who have fuliza and non-fuliza line.

FULIZA loans stand at 1.7BN Kenya shillings daily....that's over 500BN annually.

Over the last 24HRS...Hustler fund has disbursed over 500MN and that number will keep growing.

People who are receiving these funds believe that it's a token for appreciation for voting Ruto and they are not bound to pay..infact I heard some people ask whether Ruto can jail 1MN Kenyans if they fail to pay and even if they get jailed whether goverment has enough funds to feed them in Kamiti prison.

The question is,How will GOK ensure that these loans are repaid?

[Githunguri]

By tightly coupling it with mpesa which they already did;
That mean deduction can be made automatic after 14 days;
This privelege Fuliza enjoy;
They dont need to call you; they just deduct from M-pesa balance;
The same ought to happen; on the 14th day - whatever you have should be deducted;
Anyway as long as they are willing to learn and adapt based on the data;
They will adjust;

Great thing; Ruto is very open minded; and has no entrenched position on anything; whatever works

Hustler fund will be made to have highest priority on deduction because Ruto will want this to work;

Next is to weed out people who register with many lines; I dont know how they do this; but they are people who have fuliza and non-fuliza line.

FULIZA loans stand at 1.7BN Kenya shillings daily....that's over 500BN annually.

Over the last 24HRS...Hustler fund has disbursed over 500MN and that number will keep growing.

People who are receiving these funds believe that it's a token for appreciation for voting Ruto and they are not bound to pay..infact I heard some people ask whether Ruto can jail 1MN Kenyans if they fail to pay and even if they get jailed whether goverment has enough funds to feed them in Kamiti prison.

The question is,How will GOK ensure that these loans are repaid?

FULIZA=HUSTLER FUND.

No difference.

[RV Pundit]

With low interest; no fees; and saving & pension component; it should take over fuliza; nationalize fuliza; for public good;

FULIZA=HUSTLER FUND.

No difference.

[Githunguri]

With low interest; no fees; and saving & pension component; it should take over fuliza; nationalize fuliza; for public good;

FULIZA=HUSTLER FUND.

No difference.

I think FULIZA is over rated.

Out of 65BN safaricom annual profit,FULIZA only brings about 4BN as profit..It's an overrated risky venture.Its only sustainable through high interest rates to ensure that those who repay high interest cover up for the defaulters.

To put matters into perspective,A bank like KCB gives 700BN loans (40BN loans in a financial year) and made 32BN in profit...these loans are securitized through title deed,log book,letters of credit,lpo which means the likelihood of default is NIL by recovering money through auctions HOWEVER in the case of Fuliza it had to give 500BN worth of loans annually to make a meagre about 4BN profit...see the difference?

That's why Kenyan banks have refused to finance it and YOU can only get 2000 Bob from hustler fund or FULIZA due to risk of default.

Lastly,What is important?GOK to borrow 40BN annually from lenders and Give 2000 shilling from hustler fund to 20MN Kenyans..that's 40BN a year.What is important?2000 Bob to each Kenyan on 10 Dams from the 40BN?

Fuliza is 40% CBA 40% Safaricom and 20% KCB...It's annual profit is about 5BN..That means CBA kenyatta makes about 2BN from it annually.Thats very little amount.Based on the risk based lending with no collateral...any GOVERMENT intervention on this business will lead to its collapse and KCB CBA and SAF will exit it.

If not drinking alcohol and waking up at 5AM gives birth to such policy decisions,I'd rather have a drunkard in state House who wakes up at 10AM.

Hustler fund ponzi scheme.

[RV Pundit]

Fuliza started three years ago and is growing at 35 percent annually on average... Safaricom made close to 6B..you can imagine total for three is therefore 15B annual..Fuliza repayment is 103.5 percent..or basically no default therefore risk free money with almost zero cost of credit..as it just servers running algorithms.By next year it will be earning 20B..5 yrs 100B in profit with zero cost anually.This money hustler fund should go for by offering zero interest and take profit as savings and pensions..these pensions fund with assured a billion per year can dwarf nsssf..even 2OB annually grow fast into serious money.That saving can be used for long term investment...buying hustlers houses or buildings dams.Kick Kenyatta out of Fuliza and make hustler fund the default Fuliza.By offering zero interest but saving and pensions hustler fund can easily scale to serious levels...in 2027..Kenya entrepreneur saving n pensions fund will be largest such fund investing in seriously stuff.. Kenyatta vampire can go crying.. hustler fund should be default Fuliza on all network...the rest should offer opt in loans regulated by Central Bank...new central bank governor should disallow Fuliza and let hustler fund occupy that space.kenyatta otherwise will become even richer. Hustler fund should pay safaricom and telcoms some fee per transaction..then Kenyans can perpetually take hustler fund as they build their saving and pensions fund ..after 15yrs each hustler will have pensions fund of millions without realizing it

[Githunguri]

Fuliza started three years ago and is growing at 35 percent annually on average... Safaricom made close to 6B..you can imagine total for three is therefore 15B annual..Fuliza repayment is 103.5 percent..or basically no default therefore risk free money with almost zero cost of credit..as it just servers running algorithms.By next year it will be earning 20B..5 yrs 100B in profit with zero cost anually.This money hustler fund should go for by offering zero interest and take profit as savings and pensions..these pensions fund with assured a billion per year can dwarf nsssf..even 2OB annually grow fast into serious money.That saving can be used for long term investment...buying hustlers houses or buildings dams.Kick Kenyatta out of Fuliza and make hustler fund the default Fuliza.By offering zero interest but saving and pensions hustler fund can easily scale to serious levels...in 2027..Kenya entrepreneur saving n pensions fund will be largest such fund investing in seriously stuff.. Kenyatta vampire can go crying.. hustler fund should be default Fuliza on all network...the rest should offer opt in loans regulated by Central Bank...new central bank governor should disallow Fuliza and let hustler fund occupy that space.kenyatta otherwise will become even richer. Hustler fund should pay safaricom and telcoms some fee per transaction..then Kenyans can perpetually take hustler fund as they build their saving and pensions fund ..after 15yrs each hustler will have pensions fund of millions without realizing it

Wacha story.

(1) DEFAULTERS.

 FULIZA has 8MN customers..It had 4MN defaulters whom Ruto removed from CRB over a month ago...It's called RISK BASED LENDING.Average of 350 shillings a person.

(2) Investment Vs earnings.

Let's compare e.g KCB Vs FULIZA.
KCB-loans 800BN Profit 40BN.ROI 5%
FULIZA-loans 500BN Profit 5BN.ROI 1%

For FULIZA to make the 20BN you are talking about,It has to invest 2TN...The Return of investment (ROI) is 1%.

Banks pay hundreds of billions in taxes to GOK..Over 100BN annually..GOK should focus on creating a proper regulatory environment for digital loans and earn maybe 50BN in taxes but investing 2TN to earn 20BN ni upuzi while it can earn that money through proper regulations of digital lenders.

Too much risk exposure for very low earnings.

GOK is a shareholder of KCB and SAFARICOM which own FULIZA 60%....Gov earns tax and dividends..therefore this kenyatta theory you are propagating doesn't hold at all.

The work of GOVERMENT is to regulate business and subsidise them...It should strengthen private companies offering digital loans in the name of fuliza and earn taxes not to disrupt business through popular hype.

[RV Pundit]

Where are you getting 4M are from Fuliza? Those struggling with bad debts are digital loans outside Fuliza - Mshwaris, Talas, KCB Mpesa. Fuliza is tightly coupled with Mpesa - you cannot simply operate without repaying.

Ruto should replace Fuliza with Hustler Fund because it's holy grail - CBA and KCB should do Mshwari and such loans. They can load interest on Mshwari as they struggle with 64% repayment

Fuliza oscillate btw 99-100 repayment rate.

This can be used for public good - to improve the countries saving and pensions while loaning people low interest- rather than benefiting the evil kenyatta empire.

And that 50B is rolled over and over - you dont need 2Trillion - you borrow 50B in a week - return 50B in a week - in a year that is 50B times 52 that 2.5 trillion...5% of it becomes savings and pension...very soon it can even become more than kenya gdp...and you can raise saving by whopping 10%...which can transform this country...eliminate the need to borrow lots of loans to finance budget deficit.


So basically booth Fuliza from Mpesa overdraft and make Hustler Fund the overdraft - and this will be GOOD FOR ALL KENYANS.

https://allafrica.com/stories/202111110066.html
It is also the best performing in terms of repayment rate especially due to its unique model of automatically deducting outstanding dues from any receipts in the borrower's M-Pesa account.

The repayment rate of Fuliza loans stood at 99 per cent during the period compared to KCB M-Pesa and M-Shwari which recorded repayment rates of 98.6 per cent and 63.5 per cent respectively.

Wacha story.

(1) DEFAULTERS.

 FULIZA has 8MN customers..It had 4MN defaulters whom Ruto removed from CRB over a month ago...It's called RISK BASED LENDING.Average of 350 shillings a person.

(2) Investment Vs earnings.

Let's compare e.g KCB Vs FULIZA.
KCB-loans 800BN Profit 40BN.ROI 5%
FULIZA-loans 500BN Profit 5BN.ROI 1%

For FULIZA to make the 20BN you are talking about,It has to invest 2TN...The Return of investment (ROI) is 1%.

Banks pay hundreds of billions in taxes to GOK..Over 100BN annually..GOK should focus on creating a proper regulatory environment for digital loans and earn maybe 50BN in taxes but investing 2TN to earn 20BN ni upuzi while it can earn that money through proper regulations of digital lenders.

Too much risk exposure for very low earnings.

GOK is a shareholder of KCB and SAFARICOM which own FULIZA 60%....Gov earns tax and dividends..therefore this kenyatta theory you are propagating doesn't hold at all.

The work of GOVERMENT is to regulate business and subsidise them...It should strengthen private companies offering digital loans in the name of fuliza and earn taxes not to disrupt business through popular hype.

[RV Pundit]

And Fuliza loan average are 375 - and most are locked perpetually - paying off and immediately borrowing. This holy grail for kenyatta evil empire.

Meanwhile, the average Fuliza loan is about Sh375 per transaction, highlighting the facility's reach especially among the lower-income cadres of M-Pesa users, compared to KCB M-Pesa and M-Mshwari whose average loan size is Sh9,070 and Sh6,047 respectively.

[Githunguri]

https://www.businessdailyafrica.com/bd/markets/capital-markets/ncba-writes-off-sh11bn-digital-loans--4032320

[RV Pundit]

They are struggling with Mshwari with 65 percent repayment...and has blacklisted millions.

The main issues with Fuliza was HIGH INTEREST rate..1.15 percent daily rate which was 365 percent. This unacceptable. Huslter Fund is giving money at 8 percent annually and 0.002% percent daily - next is to give Hustler Fund first priority in Mpesa deduction.

That is what Ruto has squeezed them on...Fuliza.

On Mshwari...the blacklisting need to end...this too is unacceptable

In short we cannot allow Kenyatta to colonize kenya. He can colonize you willingly but as long as Ruto is aware of the issues - Kenyattas will be cut to size

Their state capture ended with Raila failed bid.

Now every kenyan can benefit from MPESA - which is public good - why should some few banks have right to automatic deduction??

https://www.businessdailyafrica.com/bd/markets/capital-markets/ncba-writes-off-sh11bn-digital-loans--4032320

[hk]

The government is borrowing at 12% but lending at 8%, so taxpayers are subsidizing 4%. The biggest weakness apart from the subsidy is data, hustler fund doesn't have enough data on borrowers to determine how much to lend. Maybe they should have combed kra, licenses, ecitizen data use that info as bases for lending. There's no reason why the hustler fund interest rates would be lower than treasury bill rates. (my two cents).

[RV Pundit]

I think first trying to fill an existing gap - there is no gap for people looking for big loans - there is a gap for people at bottom of pyramid - which is now being filled by shylocks, credit from duka, relatives, microfinances and all sort of people. These shylocks like credit lending is making poor people situation even more critical...confing them deeper into poverty with huge interest compounding their loans...those in micro-finance are losing their cows..or land.

There is a reason why China and even Ethiopia refused for a long time to allow commercial banks to operate until they developed - that reason is private banks will simply lock out most people by outpricing them as they cannot take risk gov can take - they will consider credit unworthy. Our experience with SOE of course shows it also easy for them to become politicized...we saw with KFA, KCB and National Bank...big cats take billions of loans and sink state owned banks.

So I think Hustler Bank is an opportunity to run SOE development subsidized bank without emotion/politics - all this will be computer algorithms based on behaviorial data that lend tiny micro loans - hopefully their ability to identity the most undeserved will improve - and to reward those that are disciplined and repaying. Hopefully it will deliberately lock out middle class and others from it....so they continue going to the usual banks where they expect modern banking at 15 percent.

Hustler Fund should never be about big ticket loans.  Equity Banks have said once you graduate from this Hustler Fund - and hopefully with your savings and pensions - you can walk to commercial bank - and take huge loan.

In terms of scale - as you said - only 10% of 30m kenya adults are formally employed - so this has potential to serve 27M people - if you give them 500shs daily - they hussle with it - and repay with little interest daily - that is a lot of money.

Fuliza is doing almost 2B daily based on computer algorithm with 7million customers.

Hustler fund at almost zero daily interest can do 10B daily with 30 million customers - and money get rolled over and over - and in a year - this will be serious money - maybe 3 trillion kshs - if 5% of it get saved - that is 150B kshs worth of savings and pensions....which gov can top up with 75B...making it 250B kshs savings per annum with average loan size of 500shs daily.

The hustlers would have already beaten the formal economy by their sheer volume. Mpesa itself is an hustler bottom of pyramid success story - people sending small money - but now it exceed GDP.

The only risk is people not repaying as they take it as gov handout - which is why it has to be coupled with m-pesa - deduction must happen automatically - otherwise it will FAIL.

The government is borrowing at 12% but lending at 8%, so taxpayers are subsidizing 4%. The biggest weakness apart from the subsidy is data, hustler fund doesn't have enough data on borrowers to determine how much to lend. Maybe they should have combed kra, licenses, ecitizen data use that info as bases for lending. There's no reason why the hustler fund interest rates would be lower than treasury bill rates. (my two cents).

[hk]

I think first trying to fill an existing gap - there is no gap for people looking for big loans - there is a gap for people at bottom of pyramid - which is now being filled by shylocks, credit from duka, relatives, microfinances and all sort of people. These shylocks like credit lending is making poor people situation even more critical...confing them deeper into poverty with huge interest compounding their loans...those in micro-finance are losing their cows..or land.

There is a reason why China and even Ethiopia refused for a long time to allow commercial banks to operate until they developed - that reason is private banks will simply lock out most people by outpricing them as they cannot take risk gov can take - they will consider credit unworthy. Our experience with SOE of course shows it also easy for them to become politicized...we saw with KFA, KCB and National Bank...big cats take billions of loans and sink state owned banks.

So I think Hustler Bank is an opportunity to run SOE development subsidized bank without emotion/politics - all this will be computer algorithms based on behaviorial data that lend tiny micro loans - hopefully their ability to identity the most undeserved will improve - and to reward those that are disciplined and repaying. Hopefully it will deliberately lock out middle class and others from it....so they continue going to the usual banks where they expect modern banking.

Hustler Fund should never be about big ticket loans.  Equity Banks have said once you graduate from this - and hopefully with your savings and pensions - you can walk to commercial bank - and take huge loan.

The government is borrowing at 12% but lending at 8%, so taxpayers are subsidizing 4%. The biggest weakness apart from the subsidy is data, hustler fund doesn't have enough data on borrowers to determine how much to lend. Maybe they should have combed kra, licenses, ecitizen data use that info as bases for lending. There's no reason why the hustler fund interest rates would be lower than treasury bill rates. (my two cents).

We're talking of 1k to 100k loans not astronomical amount. Most of Fuliza funds are used as credit lines by msme and smes. The hustler fund shouldn't be startup capital, its for already existing businesses that cant get cheap funds, otherwise the effect will be marginal at best or loan uptake will be subdued.

[RV Pundit]

Fuliza average loan size is 350 and it's already approaching 500B kshs.
The scale here is enormous.
If hustler thing becomes popular - because it's zero interest - maybe 20-30million people will start to borrow.
And it becomes hard to discriminate.
So I think 500shs borrowed daily - and repaid daily - is better than giving these people 50k or 100K - they misuse - and are in problem.
Maybe the money just oil their business - until they graduate to borrow from banks.

30M people if each borrow 1K daily is 30B Kshs. Annually that is what 110B dollars or 11 trillion Kshs. That is already Kenya GDP.

And to get out of poverty - typical family needs two dollars a day per person - 5 dollars per person to become middle class.

I wont go for vertical scaling before we nail horizontal scaling...net everyone in.....then now slowly increase the average loan size.

We're talking of 1k to 100k loans not astronomical amount. Most of Fuliza funds are used as credit lines by msme and smes. The hustler fund shouldn't be startup capital, its for already existing businesses that cant get cheap funds, otherwise the effect will be marginal at best or loan uptake will be subdued.

[hk]

Fuliza average loan size is 350 and it's already approaching 500B kshs.
The scale here is enormous.
If hustler thing becomes popular - because it's zero interest - maybe 20-30million people will start to borrow.
And it becomes hard to discriminate.
So I think 500shs borrowed daily - and repaid daily - is better than giving these people 50k or 100K - they misuse - and are in problem.
Maybe the money just oil their business - until they graduate to borrow from banks.

30M people if each borrow 1K daily is 30B Kshs. Annually that is what 110B dollars or 11 trillion Kshs. That is already Kenya GDP.

And to get out of poverty - typical family needs two dollars a day per person - 5 dollars per person to become middle class.

I wont go for vertical scaling before we nail horizontal scaling...net everyone in.....then now slowly increase the average loan size.

We're talking of 1k to 100k loans not astronomical amount. Most of Fuliza funds are used as credit lines by msme and smes. The hustler fund shouldn't be startup capital, its for already existing businesses that cant get cheap funds, otherwise the effect will be marginal at best or loan uptake will be subdued.

That would make hustle fund a revolving credit which impact would be marginal at the individual level.