Murang'a Sacco wants Hustler Fund channeled through co-operatives

Murang’a-based Amica Sacco wants the Kenya Kwanza government to channel the Sh50 billion Hustlers Fund through co-operatives.

President William Ruto has announced plans to operationalise the fund in December this year to support Small and Medium Enterprises.

But Amica Sacco’s CEO James Mbui has said co-operatives present the best way of disbursing the money to the people in the grassroots.

This is because they have structures that bring people together and are in most parts of the country, he said.

“If the money is disbursed through co-operatives it will be able to reach SMEs, especially those affected by drought and business will thrive,” he said.

The sacco, Mbui revealed, has had discussions with the county government to offer subsidies to help agribusiness and SMEs flourish.

Mbui hailed the national government for creating a ministry for co-operatives and SMEs saying this will serve as a boost to the sector.

The CEO expressed confidence that the economy will recover with the new government, especially with the billions expected to be pumped into the grassroots through the fund.

Speaking during the firm’s special general meeting, Mbui said many SMEs have been struggling under the current economic times with majority struggling to repay their loans.

“Many SMEs are staying away from credit and those with loans are struggling to repay them. We have had to re-structure some of those loans to help them through the difficult times,” he said.

Being an elections year, Mbui said the sector took a hit from the turbulent economy that has been worsened by drought and high cost of fuel.

This has in turn driven the firm’s default rate on loans to about 20 per cent.

The agriculture sector that the firm depends on has not been as badly affected as it has seen prices of commodities such as coffee, tea and milk rise and stabilize.

“Majority of our coffee co-operative societies paid at the rate of 100 per kilogram which is commendable,” Mbui said.

During the special general meeting, the sacco told its delegates that it projects to record a growth of Sh1 billion by the end of this year despite the harsh economy and Sh1.2 billion in 2023.

The growth is expected to be driven by member deposits and better management of the loan book.

It is currently training its workers on marketing skills and will soon start meeting its members in the grassroots, especially avocado, tea, coffee and dairy farmers. It is also planning to train SMEs on saving small monies to benefit from cheaper credit.

The sacco’s average growth in terms of revenue is 13 per cent and has achieved its projected budget for this year by 85 per cent.

Its asset base stood at Sh6.4 billion as at September this year while its share capital has grown by 10.8 per cent since January this year.

Its loan book however registered a decrease of 8 per cent in growth at Sh5.06 billion while the total revenue was Sh764 million.

The CEO said the President’s pledge to prioritise agriculture as a critical sector in the country’s economic revival offers hope to many farmers who will benefit from improved livelihoods.

“The President said farmers will be registered to get incentives and be trained on beneficial farming practices through customised extension services. Such inducements will greatly benefit our members.”