IN SHORT: As default rates on the government’s low-interest “hustler fund” scheme rise, claims are circulating that the money is to be recovered through M-Pesa debits. This is not true.
Debts owed to a government-backed scheme will be drawn from Kenyan users’ mobile money wallets, according to a graphic on Facebook.
The graphic, dated 2 February 2024, reads: “Hustler Fund debts to be deducted directly from M-pesa as from Saturday.”
The “hustler fund” was launched in 2022 as a government-backed KSh50 billion (about US$409 million at the time) scheme. It aimed to provide cheap loans, including to small businesses, at an annual interest rate of 8%.
M-Pesa is a mobile phone-based money transfer, payment and microfinance service. It was launched in 2007 by mobile phone network operators, Vodafone and Safaricom.
The graphic features a photo of Kenya’s interior minister Kithure Kindiki and attributes the quote to him. It also incorporates the logo and branding of Citizen Digital, the online platform of Kenya's largest broadcaster.
In July 2023, Ruto said those who had defaulted on their individual loans would not be able to access the fund's second product, group loans.
By December 2023, 11 months after its launch, the value of the fund's loan defaults was close to KSh10 billion ($62.3 million).
According to the fund’s website, interest rates are adjusted to 9.5% per annum 15 days after the date of default. Thereafter, persistent defaults of 30 days or more will result in the borrower losing their existing credit score and having their account frozen. The interest rate will continue to accrue according to the in-duplum rule and debt collection procedures will be initiated.
The in-duplum rule states that interest and fees charged on a debt cannot exceed the original principal amount of the debt. It aims to protect borrowers from accumulating excessive debt through interest and other charges.
So, is the graphic legit? We checked.
Ignore fake graphic
Citizen TV is one of the mainstream channels and is considered a credible source of news. If the claim were true, many defaulters would avoid making transactions on M-Pesa, a major trading platform in the country.
On 2 February 2024, the broadcaster, through its official Facebook account, marked the graphic as “FAKE”.
“Another day, another fake poster. Kindly disregard this message purporting to be from us. Thank You,” wrote Citizen TV Kenya.
Republish our content for free
For publishers: what to do if your post is rated false
A fact-checker has rated your Facebook or Instagram post as “false”, “altered”, “partly false” or “missing context”. This could have serious consequences. What do you do?
Click on our guide for the steps you should follow.Publishers guide
Africa Check teams up with Facebook
Africa Check is a partner in Meta's third-party fact-checking programme to help stop the spread of false information on social media.
The content we rate as “false” will be downgraded on Facebook and Instagram. This means fewer people will see it.
You can also help identify false information on Facebook. This guide explains how.