•About 7 million people are in this category of digital borrowing. This is an expansion from the previous borrowing of between Sh700, to Sh2000 that they were accessing on other platforms.
•Many times he said that previously the loans have not been reaching the beneficiary
SACCOs are expected to be major players through which Kenyans will access the Hustler Fund.
According to the new Cooperatives and MSME development Cabinet Secretary, Simon Chelugui, the cooperative societies play a critical role in saving, mobilisation and intermediation in accelerating financial inclusion for millions of Kenyans who would have been excluded from the mainstream financial sector.
Speaking during a consultative meeting with the leadership of cooperatives under the Cooperatives Alliance of Kenya (CAK), the CS said that cooperatives are the heartbeat of the current administration.
“The most important emergent development and key economic policy intervention of the new administration is the Financial Inclusion Fund, which is the Hustler Fund," he said.
He noted that President William Ruto's intention is to enable Kenyans at the bottom of the pyramid to access affordable and timely credit facilities since most of them had been previously locked out of the credit facilities.
“We want to boost a saving culture while creating momentum for sustainable development and there are our products that will be supported by the fund namely the Personal loan, Micro Loans, SME loans and Start-up loans," he said.
The CS confirmed that the personal loan product has been finalised as well as the regulations which are now undergoing public participation. He said the first rollout of this flagship programme will be unveiled and launched on November 30 this year by the President.
He promised the Saccos that they will be fully involved in Micro and SME lending while the personal loans will see Kenyans borrow digitally ranging between Sh500 to Sh50,000.
About 7 million people are in this category of digital borrowing. This is an expansion from the previous borrowing of between Sh700, to Sh2000 that they were accessing on other platforms.
"The difference of this fund will be how we lend and that is through the credit scoring, which is a critical tool to assess the suitability and eligibility of access to the fund. Shifting from collateral way of lending to now credit scoring," he said.
"Once we are done with the personal loans, we will now move to the Microloans and this is where the cooperatives and saccos, will be engaging with the government."
Many times he said that previously the loans have not been reaching the beneficiary and that banks have been holding back the money and using it to lend to commercial borrowers therefore the impact has not been felt.
“We will have service level agreement with SACCOs and banks who qualify for this facility to ensure that delivery is done so that we achieve the intended call but through an intermediary through criteria being developed. We are on a mission to ensure we impact at the bottom of the pyramid," he said.
Chelugui promised that the other policy initiatives that the ministry will be implementing in the coming months are the Central Liquidity Facility CLF) and also shared services platform and Deposit Guarantee Fund (DGF), as well as the ongoing coffee sub-sector.
“We will be increasing production of coffee from the current 40 metric tonnes to 140 metric tonnes per annum. The dairy sub sector by increasing production from 1.5 million to 3 million litres per day," he promised.
At the same time, Chelugui put employers who delay remitting Sacco members' contribution on notice.
Cooperative Alliance of Kenya Chairman Mccloud Malonza called for the prioritization of the enactment of the Cooperatives societies bill into an Act by parliament.
He also called for re-organization of the cooperative movement into federations to support growth in production, value addition and diversification of economic activities.
“We want to position cooperatives to play a key role in promoting environmental sustainability through adoption of climate-friendly production initiatives, financing and adoption of green energy," he said.