President William Ruto has set a new launch date for the eagerly awaited Ksh50 billion hustler fund, while also imposing new borrowing restrictions.
The initiative was authorized by the Cabinet on Tuesday, November 15 during a meeting presided over by the president. Ruto moved the launch date up from December 1, 2022, to Wednesday, November 30, 2022.
The legislative and organizational framework for creating and implementing the hustler fund was also approved by Cabinet members.
Read: President William Ruto Sets Conditions For Ksh50 Billion Hustler Fund
The Fund is anticipated to promote a savings culture and offer affordable lending options while fostering sustainable growth. Loan payments will range from a minimum of Ksh500 to a maximum of Ksh50,000, which will be based on the borrower’s credit score.
The cabinet announced that the loan interest rate will be capped at 8% yearly and calculated on a prorated basis as the first single-digit credit product in the country and the region.
The leaders commended the Central Bank of Kenya (CBK), Financial Intermediaries and Financial Institutions, as well as Mobile Network Operators, for their contribution to steering the growth of the Fund.
The new hustler fund amendments sparked numerous reactions from citizens on social media including, Professor Makau Mutua who took to his Twitter page to air his sentiments.
“WHAT, pray, can a “hustler” do with a loan of KES 500-50,000 at an interest rate of 8%? A cruel joke on “hustlers.” A gimmick, a head fake. The so-called Hustler Fund is DOA. There’s no there there, if this is THE “plan.”
Mohammed Wehliye who also shared his remarks. “Expand businesses. You can’t borrow from Hustler Fund on a daily basis like you borrow from Fuliza. In my opinion, a max ticket size of 50k for hustlers & hustler MSMEs for loan capital is, therefore, too small to make an impact.”
The Cabinet has also given its approval to the proposed establishment of the Centre for Entrepreneurship. The project seeks to use micro and small businesses to generate jobs.
Read: Ruto’s Government To Construct KSh. 1 B Aquaculture Project In Kisumu
Kenya and Germany will collaborate to create the Center, which would be housed within Kenya Industrial Estates (KIE). It will target 250,000 young entrepreneurs nationwide who are between the ages of 18 and 35. They will receive information from the program on marketing ads, the website, and phone calls to the centre.
Additionally, it is anticipated that 100,000 young entrepreneurs will have access to comprehensive screening services including coaching, mentoring, and career advice. It is also predicted to generate over 50,000 direct and indirect jobs by increasing manufacturing production and boosting the overall competitiveness of the country.
Speaking during the 58th Mashujaa day celebrations at Uhuru Gardens on Thursday, October 20, 2022, President William Ruto indicated that borrowers will have to participate in a short-term savings plan and long-term pensions program to access the funds.
Read: List Of President William Ruto’s Cabinet Nominees And Their Worth
The President also noted that the funds would only be made available at reasonable rates to small businesses that are registered on digital platforms. The Head of State had previously stated that the cash would not be available as grants but rather as loans that must be repaid.
President Ruto added that credit products would be available to both individuals and businesses, noting the great demand for affordable credit among Kenyans and their high hopes for his campaign pledges.
Treasury also listed four offences that might result in fines of up to Ksh10 million or a five-year jail sentence for Kenyans who commit them.
Penalties will apply for offences including misappropriating funds, failing to provide information, or providing false information when applying for the funds.
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