The government will share 7 million consistent Hustler Fund borrowers’ data with banks for bigger loan consideration.
“These are individuals who could not access credit from banks and other financial institutions because of the stringent requirements put in place, through the Fund platform, they have proved to be consistent and repay their loans promptly,” Simon Chelugui, Cabinet Secretary Ministry of Co-operatives and Micro, Small and Medium Enterprises (MSME) Development, said.
- The Hustler Fund will turn one-year next week and has 22 million accounts.
- 19 million people have used the platform to access KSh 6000-KSh 29,000.
- Savings on the platform, which are automatically deducted as 5% of the loan, have hit Sh2 billion so far.
“The Fund is not a competitor to the bank business, we are appealing for partnership with financial institutions in a government programme targeting to upgrade 5 million people from informality to formality,” CS Chelugui added.
Speaking during this year’s Inua Biashara Day and MSME Expo in Nairobi, CS Chelugui said the government will address market access, finance access and digitalization challenges the MSMEs sector face by reviewing policy, addressing infrastructure, and taxation problems raised.
- Research by the Kenya National Bureau of Statistics indicates that the average lifespan for an MSME in Kenya is three years and eight months;
- 46 percent of them close shop within the first year of operation.
- Often, lack of access to credit is among the key reason for business failure.
“The importance of SMEs to the economy cannot be overstated. Research shows that the SME sector contributes 34 percent of the GDP in Kenya; thus, providing the need for a deliberate effort to continue supporting the sector,” Habil Olaka Kenya Bankers Association Chief Executive Officer said, “Through the Inuka SMES Program, banks are considering specific products that will be affordable and accessible to SMEs with the view of supporting them.”
Olaka added the banking industry will continuously engage all stakeholders involved including parliament, the Central Bank of Kenya and policymakers to ensure that banks are providing competitively priced credit to Kenyans.
“We remain committed to enhancing the principle of transparency and accountability to ensure that all credit issued to borrowers is transparently and fairly priced. To achieve this, we shall be guided by the Central Bank of Kenya charter and ensure that all information on credit facilities remains accessible on the cost of credit website.”