Ruto Divides Ksh50 Billion Hustler Fund Into Four Categories

President William Ruto's government has made changes to the Ksh50 billion Hustler Fund, which is one promise by the Kenya Kwanza administration that has rocked the country and got Kenyans talking.

Cooperatives and Small and Medium Enterprises (SMEs) Cabinet Secretary Simon Chelugui, while taking over from the two ministerial dockets from outgoing CSs Peter Munya and Betty Maina on Monday, October 31, said the fund will be classified into four categories which will be rolled out on a phased basis.

The products include personal finance products, micro-businesses, MSMEs and the final category targeting Kenyan startups.

He admitted that he faces the real task of turning around the woes of many of the country's Small and medium-sized enterprises collapsing due to lack of funding.

Simon Chelugui taking his oath of office on October 27, 2022, as Cooperatives CS. /TWITTER

While affirming that the Hustler Fund will be operational on December 1, 2022, Chelugui announced that the SMEs will be first put into consideration and that the personal finance products will be implemented by then. 

“We will begin by enumerating the Small and Medium businesses, and on December 1 we are offering four products. The first products will be the personal finance products and that is currently under development we believe beginning today we will not sit down, roll our sleeves and begin to work on a product,” Chelugui explained.

The CS assured that the Fund will provide interventions to address the biggest challenge among the youth and owners of small businesses.

The second fund which will focus on MSMEs will begin in early 2023, and it will be followed by the unveiling of a product targeting SMEs before concluding with start-ups.

“Micro-business will be supported through Savings and Credit Cooperative Societies (SACCOs) and the Chamas which are already in place. I have had a lot of discussions with SASRA, the regulator, and also the Commissioner of Cooperatives so that we can reach out to these established and organized collectives and we can be able to immediate impact by working with them,” he said.

Chelugui acknowledged that many Kenyans are in desperate need of cheap credit and had piled huge pressure on the Kenya Kwanza administration to meet its campaign promises.

He added the ministry is looking at avenues that will make credit products available to small businesses on digital platforms at affordable rates.

“In the end, we will be looking at the start-up, the young people in college and universities who have great ideas and may need support. They have always had their challenges and have been treated like anybody else and it is difficult for them to take off,” he added.

The Hustler Fund will involve the setting up of special financing to be actualised through Infrastructure Fund, National Housing Fund, Settlement Fund and Social Welfare, among the major promises President Ruto made during his campaign trails.

Chelugui stunned Kenyans during his vetting when he revealed that  “there is no free money. The Hustlers Fund is not free money. It is money that will provide hustlers with affordable credit at a single-digit interest rate.”

President Ruto listed three critical areas of the Fund during his Mashujaa Day speech:

1. Credit products will be available to small businesses on digital platforms at affordable rates to individuals and through chamas, groups, saccos and cooperatives.
2. All borrowers on this platform will also participate in a short-term savings plan and long-term pensions program. Every saving made by borrowers on this platform will be merged by the government of Kenya on a 2:1 ratio to a level to be determined by the program.
3. I will launch this Hustler Fund credit and savings product on the 1st of December this year.

The president's campaign promises sought to bring about a new economic order that would deal squarely with unemployment and lack of opportunities for the youth.

President Ruto specifically vowed to commit billions of shillings to support sectors such as boda boda and small retailers using the Ksh50 billion fund.