NAIROBI, Kenya, October 15 – President Ruto has said the government will operationalize Hustlers Fund before December to ensure availability of credit to small businesses at single digit rates.
Speaking at the inauguration of the Thiba Dam in Kirinyaga, Ruto said the Hustler Fund will help reduce the cost of credit for small businesses, ensuring that everyone can borrow money at a reasonable rate and therefore to solve the lack of resources to manage small businesses in the country.
“I want to assure Kenyans that the implementation plan for the Hustler Fund will be ready by December this year,” he said.
“We are already modifying and testing it and when I do all this planning you also have to organize yourself in terms of registration in Saccos, groups and cooperatives.
Ruto said he has set up a specific department to manage cooperatives, small and medium enterprises (SMEs), Chamas and Saccos.
“When I plan how to disburse money from my side, I want you to prepare to receive the money in the named groups,” he added.
“I can’t disburse the government money anyway, there has to be a strategy on how you are going to receive the money responsibly.”
“We’ll let you know how much the single-digit rate will be but we’ll make sure the fund is set up for everyone and those who are going to benefit from it can use it well.”
President William Ruto pledged to create a Hustler Fund in his 2022 campaign manifesto and continued that commitment in his September 13 inauguration speech.
He said people in the low-income bracket he called “scammers” will have access to affordable credit for their businesses through the proposed fund.
“We will set up the Hustler Fund, dedicated to the capitalization of micro, small and medium-sized enterprises through chama, saccos and cooperatives to offer credit on affordable terms that do not require collateral,” he said in his inaugural address at Kasarani Stadium in Nairobi.
Ruto also reiterated his commitment to reforming the country’s credit system to eliminate what he called an all-or-nothing credit scoring system.
He also promised to maintain his engagement with lenders to ensure that interest rates are reasonable.
On September 28, Safaricom announced lower fees for an overdraft facility backed by two local banks as part of a plan to boost access to credit for micro-enterprises.
Ruto hailed the overhaul of the Fuliza loan product by Safaricom, Kenya Commercial Bank and NCBA Bank, calling it a step in the right direction.
Safaricom cut interest rates on Fuliza loans below Sh1000 by 40% and introduced a three-day grace period for borrowers.
The new rates which came into effect on October 1 charge daily interest of 6 shillings instead of 10 shillings for overdrafts between 500 shillings and 1,000 shillings.
Additionally, those who borrow loans between Sh101 and Sh499 will pay a daily fee of Sh3 instead of Sh5.
The new tariffs set a fee of Sh18 to Sh20 for overdrafts between Sh1,001 and Sh1,500.