President William Ruto has in recent days reiterated his administration’s intentions to deliver on the Hustlers Fund – one of Kenya Kwanza’s biggest campaign promises, and one they promised to have in place within 100 days in office.
The fund is supposed to offer affordable SME financing for Kenyans. Ruto stated that the business loans would be charged at a single digit interest rate, although the official rate is yet to be announced. In a new speech, Ruto maintained that the Hustler Fund would be rolled out by December.
Highlighting how Kenyans would access the funds, Ruto told Kenyans to prepare to benefit from the funds by organizing themselves in saccos, co-operative societies and chamas. The government is likely to partner with these groups to offer onward lending. Ruto noted that those accessing the fund would not require security as they would be backed by their saccos.
Besides saccos, major banks have also been pushing to administer the fund worth Ksh50 billion a year.
Ruto asserted that the loans were intended to spur businesses and power growth, stating that it was not ‘free money from the government’. Kenya has a large and vibrant cooperative society sector, with around 14 million Kenyans being members of a savings and co-operative society (sacco).
Ruto noted that he had set up a dedicated ministry for Cooperatives and SMEs to support the plan.
“The hustler fund will be ready by December. We are working on it and testing it. As we do this, you should also get ready. How to get ready is to organize yourselves in saccos, chamas and cooperatives,” Ruto stated.
“..This is how we will ensure no one asks you for security and you will access credit at affordable rates, because your group will be your security,” he added.
Ruto had previously tasked Treasury and Social Planning CS Njuguna Ndung’u and his ICT counterpart Eliud Owalo with the development of a product that would facilitate affordable access to credit for regular Kenyans. At the event in September to announce lower fees on Safaricom’s Fuliza credit facility, Ruto stated his desire to work closely with the telco and its banking partners to increase access to affordable credit.
“The government of Kenya, and I have the nominee for Treasury and the nominee ICT here, …will be working with you in the fintech space because we want to work on a credit [facility], especially for micro, small and medium enterprises,” Ruto told the chief executives of Safaricom, KCB and NCBA.
“In the short-term, the assignment my good friend Eliud Owalo (Cabinet Secretary nominee for ICT) and Prof Njuguna Ndungú [Cabinet Secretary nominee for National Treasury] will have is to structure with yourselves [Safaricom and its partners] the hustler fund.”