The Hustler fund has been a place for many Kenyans looking for easy access to quick loans. The Hustler Fund is a government initiative launched by President William Ruto. The funds’ main aim is to promote financial inclusivity in the country. But what if, after signing up, you decide it’s not the best fit for you? Can you altogether opt out of the Hustler Fund?
Unfortunately, the answer isn’t straightforward. The Hustler Fund includes a mandatory savings component. A part of every loan you take goes into a long-term savings plan. Accessing these funds before retirement age is often difficult. This means that opting out altogether might also mean losing access to your savings, making it a complex decision.
Why Opting Out of the Hustler Fund is Not Straightforward?
Here is the thing: The Hustler Fund offers both long-term and short-term savings. In other words, it was built with a long-term savings plan in mind.
For every loan taken, 5% of the money goes into savings, with 30% allocated for short-term and 70% for long-term use. It offers loans to personal and micro, small, and medium-sized enterprises (MSMEs).
Long-Term and Short-Term Savings in Hustler Fund
The Hustler Fund divides savings into two categories: 30% for short-term and 70% for long-term use. The fund also offers all its loanees a yearly interest rate of 8% on their savings, with the accrued interest deposited into customers’ accounts, providing an extra source of income.
Short-term savings can be accessed after being in the fund for a year. At the same time, the remaining 70% is accessible upon retirement at 60.
Can you opt out of the Hustler Fund after registration?
According to Elizabeth Nkukuu, the acting CEO of Hustler Fund, leaving the Hustler Fund entirely is impossible because 70% of investments are earmarked for long-term savings.
Once an individual registers for the Hustler Fund, their membership is permanent due to the fund’s structure and the allocation of a significant portion of savings towards long-term goals.
This means that customers cannot entirely opt out of the Hustler Fund, even if their financial situation changes or they no longer require the services provided by the fund.
Is There a Way to Limit Hustler Fund Activity?
Now that you understand it’s not possible to opt out of the Hustler fund, it’s best to take precautions to avoid the influx of debt. As mentioned before, the Hustler fund operates on savings schemes. Thus, your savings will be affected when you leave the fund. But at least there is a way of maybe”Opting out of the Hustler Fund,” that is, trying to reduce your interactions with the Hustler Fund loans as much as possible.
The easiest way to opt out of the Hustler fund after retirement is to Stop Taking out Loans. After all, no one will follow you up if you do not borrow. Take loan breaks, and if necessary, only borrow small amounts but make repayments on time to prevent interest rates from growing. However, be aware that stopping yourself from any Hustler fund interactions won’t stop the automatic savings contributions.
Alternatives to Hustler Fund
While opting out of the Hustler Fund is impossible, individuals may explore alternative financial solutions that suit their needs and preferences better. These alternatives may include:
- Traditional banking services
- Microfinance institutions
- Savings and credit cooperative organizations (SACCOs)
- Loan Apps
For those looking for Loan Apps, here is an article on the Top 20 Loan Apps in Kenya for quick loan loans. When making your choices, remember to evaluate the terms, conditions, and benefits of each alternative before deciding to ensure that it aligns with one’s financial goals and circumstances.
What happens if you default to Hustlers Fund?
After 15 days of default, the interest rate on the loan will increase from 8% to 9.5% per annum. After more than 30 days of default, you will lose all the credit scores you have accumulated since you registered for the loan. Additionally, 30% of your savings will be taken and put on hold until you repay the loan. During this time, you can also not apply for Huster and Products.
Can I withdraw my savings from Hustlers Fund?
While Huster Fubds offers neither long-term nor short-term savings, you can increase your savings. The fund allows you to wind up your long-term savings when you reach the age of 60 in Kenya. However, short loans can be deposited into your account once you have used the Husktker fund for a year.
To Withdraw your short savings:
- Dial *254# on your phone.
- Select the Hustler Fund option.
- Next, select the Personal Loan option.
- Go to the Savings option.
- Select the Short-term savings option from the drop-down menu.
- Select Withdraw.
- Enter the amount to withdraw to your M-Pesa.
This is all you need to know about how to opt out of the Hustler Fund Loan for friends. While it is not possible to Opt out of the Hustler Fund Loan after registration, understanding how the fund works can help you make early decisions about how to use the service and seek other alternatives if needed. If you have any other questions, please comment below, and I will assist you.
All the best.