The cabinet on Tuesday, September 17, approved the roll out of a third product of the Hustler Fund.
According to a dispatch from State House, members of the Cabinet approved the introduction of a product focused on the Small and Medium Enterprises (SME) sector in commemoration of its second anniversary.
The special loan, State House notes, will target 2 million beneficiaries who have demonstrated a strong credit history with the Fund.
According to the dispatch, members of the cabinet were in agreement that the new initiative would create a pathway for banking the targeted beneficiaries, further deepening financial inclusion within the SME sector.
“This groundbreaking initiative aims to create a pathway for banking the targeted beneficiaries, further deepening financial inclusion within the SME sector,” the dispatch read in part.
The cabinet was also apprised of the progress made in advancing financial inclusion through the administration’s flagship initiative.
Also Read: Govt Goes After Hustler Fund Defaulters in New Move to Recover Billions
So far, the Fund has disbursed Ksh57 billion to Kenyans, with at least 2 million customers now regular daily borrowers. Additionally, in keeping with the Administration’s pledge to inculcate a culture of saving for posterity, the Fund has successfully mobilized Ksh3.2 billion in savings.
Hustler fund defaulters pose challenge
The resolution to introduce a new product was made during the first cabinet sitting since the formation of the broad-based government. Hustler Fund has been among the flagship projects of the Kenya Kwanza administration that had promised to ensure financial inclusion through provision of loans with more friendly conditions.
Also Read: Oparanya Speaks on Listing Hustler Fund Defaulters in CRB
Launched in 2022, the loan has been touted as a game-changer in the MSMEs sector with the President occasionally hailing its achievements. Besides providing credit for Kenyans, the program was also aimed at inculcating a culture of savings in the country.
However, loan defaults have proven to be among the biggest obstacles to its success. Cabinet Secretary of Cooperatives and MSMEs Wycliffe Opranya has been on record warning defaulters to refund loans borrowed from the fund.
In an interview earlier in September, CS Oparanya revealed that a staggering Ksh12 billion was held by defaulters who have not paid their borrowed amounts.
The CS was, however, upbeat about the prospects of the program, noting that the savings under the fund had hit Ksh3.1 billion and that the government planned to leverage it to create an entrepreneurial culture.
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