We can’t deny that there is a gold rush currently spreading around as a majority of Kenyans try and get the newly launched Hustler Fund.
The Hustler fund is a digital financial inclusion initiative designed to improve financial access to responsible finance for personal, micro, small, and medium-sized enterprises (MSMEs) in Kenya.
It is important because it provides access to responsible finance for personal, micro, small, and medium-sized enterprises (MSMEs) by innovating, developing, and deploying bottom-of-the-pyramid financial services and products that are affordable, accessible, and appropriate for the unserved and underserved persons, including credit, saving, insurance, pension, and investment products.
President William Ruto launched the fund on Wednesday in effort to provide State-backed concessional loans to small businesses that have struggled to access financing from mainstream banks.
But from the look of things, Kenyans are going after the cash so that they can’t do other things that are totally opposite from investing.
So how can you wisely use your fund? Below are 4 ways you can avoid wasting the cash received and plunging into unnecessary loans.
1. Take -ONLY- what you need
It’s hard to say no to money especially when you are broke. But you also need to understand that the money isn’t free. It’s coming at a price therefore take as little as possible so that the interest doesn’t catch up with you.
2. Have a plan
The hustler fund is meant for investment, not for regular, day-to-day use. Therefore draft a plan of how you want to do first before applying so that when it comes, you are set to go.
3. Don’t wait till you get money to pay back
This may seem like an obvious tip, but you’d be surprised by how many people neglect to do this.
Don’t wait till when you finally have money so that you can start repaying. Because that will hardly happen.
Although only paying the minimum payments isn’t going to negatively affect your credit score, putting a little extra cash towards your loan will mean that you’ll be paying less interest down the line.
This doesn’t mean that you should double the minimum payment on your loan per month, but it would be beneficial to put whatever extra cash you have left over from your budget towards your debt.
4. Don’t worsen your debt with more debt
If you are already deep in debt, perhaps you should stay away from the Hustler Fund too.
It goes without saying that borrowing more than you can afford to pay is unwise. Similarly, borrowing money in order to pay off another debt will only serve to lighten your worries temporarily. But don’t fall into this trap — it will only worsen your situation in the long run.
If your debt-to-income ratio is anything over 50%, it’s high time you reconsider your options. Either revise your budget or book an appointment with a Licensed Insolvency Trustee.