KEPSA urges William Ruto to maintain single-digit interest rate on KSh 50b Hustlers Fund

  • President William Ruto’s government set to unveil KSh50 billion Hustlers Fund by December 2022
  • Ruto said the fund will enable small traders and low-income people to access cheap credit
  • The private sector has called on the president to keep his promise of a single-digit interest rate taken from the fund
  • Kenya Private Sector Alliance (KEPSA) Deputy Managing Director Victor Ogalo noted that the fund is similar to the Biashara fund, urging the government to differentiate between the two.

All eyes are on the Kenya Kwanza administration’s launch of the Hustlers’ Fund, scheduled for December 2022.

KEPSA Deputy General Manager Victor Ogalo speaking at a past event. Photo: KEPSA.
Source: UGC

President William Ruto said the fund will enable Kenyans to access cheap and affordable business loans.

Hustler Fund Terms

Ruto has pledged to invest KSh50 billion per year to ensure MSMEs have full access to low-cost finance through Saccos, Chamas, venture capital, equity funds and long-term loans.

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“The Hustler Fund targets growth-oriented SMEs, giving them access to credit on reasonable terms; without requiring collateral. It is one way to combat exorbitant microcredit interest rates and terms from online lenders that have trapped many borrowers in a cycle of debt,” KEPSA Deputy Managing Director Victor Ogalo said in an exclusive interview with TUKO.co.ke.

Ogalo noted that the facility requires all Kenyans with access to pay an interest rate, contrary to Ruto’s campaign promises.

He advised the government to ensure that the fund is issued to Kenyans at a non-punitive interest rate to differentiate it from the Biashara fund.

“The fact that Kenyans are required to pay interest on the Hustler Fund makes it more similar to the Biashara Fund. The interest payment model is best for maintaining the continuity and accountability of the Fund to those who borrow from it.

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“A non-punitive (single digit) interest rate on the fund should be maintained and distinguished from other facilities like the Biashara fund to avoid duplication,” Ogalo explained.

Gachagua wants the private sector to create jobs

In October 2022, Vice President Rigathi Gachagua noted that the government would use the Hustlers Fund to fill the unemployment gap.

The DP has urged the private sector to take advantage as they will be among the biggest beneficiaries of the fund.

“The biggest beneficiaries of the scammers fund will be the private sector. Because if we give KSh50 billion to the scammers to trade, where will they buy their raw materials? They will come to you,” Gachagua said. .

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Source: TUKO.co.ke

Stephen V. Lee