- Amounts ranging from Sh20,000 to Sh1 million will be available to all duly registered groups at an interest rate of seven per cent per annum.
- The launch will come seven months after the president unveiled the individual loan where over Sh28 billion has been disbursed so far.
Image: COURTESY
President William Ruto will officially launch a new product of the Hustler fund on June 1, Cooperative and MSMEs cabinet secretary Simon Chelugui has announced.
Chelugui said the product which will be accessible to all groups and cooperative societies has been undergoing technical evaluation over the last three months.
“I am happy to report that we have put in place necessary regulations and this product which will be much bigger will be launched by the president during the Madaraka Day celebration,” said the CS.
This year’s Madaraka Day celebration will be themed around MSMEs, cooperatives, trade, and revenue, and will feature a weeklong series of events including the 3rd Kenya International Investment Conference (KIICO 2023).
Amounts ranging from Sh20,000 to Sh1 million will be available to all duly registered groups at an interest rate of seven per cent per annum on a reducing balance of 1.5 per cent default rate.
The repayment period is six months from the disbursement date with borrowers having an option of repaying in installments or lump sum.
“The groups scoring will be appraised through a credit scoring algorithm based on collective individual members score, including but not limited to, their savings and repayment history,” terms of the fund reads.
It will also be available to individuals seeking to upscale their businesses where Sh10,000 to Sh200,000 will be given under the same terms.
The launch will come seven months after the president unveiled the individual loan where amounts from as low as Sh500 are being offered.
Over Sh28 billion has been disbursed so far.
Speaking during the 10th technical committee of the African ministerial cooperative conference (TCAMCCO) in Nairobi, the CS at the same time stated that the government has put in place necessary measures to secure and invest the money.
Kenya national entrepreneur trust fund (KNEST), he said, will administer the savings from the loans.
The total savings which currently stand at Sh1.4 billion, he noted, is being held in the accounts of two banks working in partnership with the government.
The money, he revealed, will be administered by the Kenya National Entrepreneur Trust Tund (KNEST) which is partnering with the Hustler fund.
From any borrowing, five per cent is deducted and channelled to the fixed savings account which according to the government 30 per cent of the total savings will be available after one year in the short term while 70 per cent is kept for the long term which is up to 70 years.
Underscoring the significance of the financial inclusion fund, the CS stated that the intervention has seen 20 million Kenyans who had initially been blacklisted by credit bureaus benefited from it.
The core objective of the Fund is to offer holistic financial solutions to people at the bottom of the pyramid with its key pillars being affordable credit, competitive savings and pension products, comprehensive insurance solutions, access to affordable housing, market linkages and financial literacy.