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Safety assured from predatory lenders when borrowing hustler’s fund

Kenyans above 18 years are expected to benefit from the Financial Inclusion Fund (Hustlers fund) which is set to be launched by President William Ruto on November 30, 2022.

The creditors have been assured of safety from being listed to CRB or even jailed in case one genuinely fails to repay the loan.

The hustlers will be able to borrow as low as Sh.500 and a maximum limit of up to Sh50, 000 as determined by the lender’s qualifications.

The fund which the President provided policy guidance for it to be established under the Public Finance Management Act, 2012 particularly under section 24 of the Act, will target mainly the informal and unstructured business enterprises that are not currently attractive to the mainstream financial institutions.

The establishment and implementation of the fund was later on approved by the cabinet during its second meeting with the president.

A taskforce was thereafter formed that will collect public views across the country in order to refine the regulations further and develop a legal framework to improve the fund.

According to the Director of Planning at the National Treasury Samuel Kiiru, there are so far 28 regulations that have been published and posted on the website by the Treasury and the Ministry of Cooperatives.

Kiiru said the regulations will only be complete after the public have provided their inputs which will later on be published on the government’s printer.

“The fund is expected to provide Kenyans at the bottom of the pyramid with affordable working capital and hence protect them from predatory lenders,” he said.

The loan interest will be capped at eight percent per year and computed on a pro-rated basis.

According to a speech by the Principal Secretary for National Treasury read by the Mombasa County Commissioner John Otieno, the legal and regulatory framework of the fund should facilitate leveraging on technology, make it convenient and easy to apply and access financial products under the fund.

“Accordingly, the legal and regulatory framework should be broad based and geared towards eliminating human interface bureaucracy common with existing government funds,” read the speech in part.

He urged coastal people to come out in large numbers and share their views to ensure the fund helps as many people as possible.

Participants from the coast region who gathered for the consultative forum shared their sentiments in regard to the fund and how it can benefit them effectively. They asked for the definition of the hustler so that the money does not end up to the fortunate in the society.

Maimuna Mwidau, Co-researcher Women Empowerment Hub at the University of Nairobi said that the amount given should be considerable to the area one comes from so that the marginalized communities are not undermined.

“We want the sharing of the money to be clear so that one knows the amount they qualify for when they need the fund, let there be also a plan where one can pay in bits and the penalty should go as per the amount one has borrowed,” she said.

The Muslim society has also suggested that the fund be considerable of the aspect of the Islamic sharia which does not allow interest, for them not to be left out.

According to Sheikh Abu Hamza from coast Muslim Scholar Union, the government should enable Islamic banks which use the Islamic module that does not allow interest to lend the money to Muslims.

Hamza requested that the amendment should be incorporated into the fund for the community to benefit, saying there are scholars that can give directions about the same.

“I want to thank the government for introducing this fund and as a leader I assure the Muslim community that it is possible to get the hustler’s fund with no interest accrued in the future as this is not permissible in our religion,” he said.

By Chari Suche

 

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