By Roy Hezron
Stakeholders in the cooperative sector have applauded the government’s move to create a full-fledged ministry for Co-operatives and Small and Medium Enterprises (SMEs) development stating that the sector more so Savings and Credit Cooperatives (Saccos) is best placed to roll out the ‘Hustler Fund’.
The Co-operative Bank of Kenya Group Managing Director and Chief Executive Officer (CEO) Dr. Gideon Muriuki during the bell-ringing ceremony to mark the launch of the enhanced Nairobi Securities Exchange (NSE) Marketplace on October 11, 2022 appreciated President William Ruto’s move to create the ministry adding that the Sacco sub-sector fully meets the requirements to roll out the ‘Hustler Fund’.
Dr. Muriuki stated that there are very good group lending models within the Saccos that will be able to take good care for the fund.
“The Sacco structure meets the requirements of successfully handling the ‘Hustler Fund’ in terms of financial access, inclusivity, affordability and overall sustainability of the fund,” said Dr. Muriuki.
Ufanisi Deposit Taking (DT) Sacco Society Chief Executive Officer (CEO) CPA Frederick Abuyabo told Sacco Review that if the Hustler Fund will be channeled through the Saccos, the sub-sector will gain in membership growth and improve liquidity ratios.
“The Co-operatives and SMES now have a full ministry. We expect the government to channel government funds to citizens through Co-operatives notably Saccos. All Hustler, Youth and Women funds will readily reach to the targeted groups if the Saccos will be chosen as media of transmitting these funds to the citizens,” said CPA Abuyabo.
However, CPA Abuyabo noted that the Saccos will have to go an extra mile in training beneficiaries of the Hustler Fund to ensure they get the correct information regarding the fund which is supposed to be paid back.
“The Hustler fund is an opportunity for Saccos to increase its earnings and membership. However, the fund was politically polarized; which will require the Saccos to do a lot of training to the hustler fund beneficiaries, in order for them to repay so that it operates like a revolving fund as per intended idea,” added CPA Abuyabo.
Symon Mburia, the acting Chief Executive Officer (CEO) of the Kenya Society of Professional Co-operators (KSPC) told Sacco Review that it is satisfying to note that the current government means well for the cooperative sector by establishing a dedicated Ministry of Cooperatives and MSME Development and given it a very clear mandate including the responsibility to ensure that the hustler fund is implemented.
“As a matter of fact, the president advices Kenyans to form groups and cooperatives in readiness for the roll out of the Hustler fund. This is a huge win for the cooperative sector and it calls upon all cooperative institutions to set up appropriate institutional mechanisms in preparedness,” said Mburia.
He added that it’s upon the Ministry of Cooperatives and MSME development, the Federations, the Professional organisations and the various non -state actors to ensure that the “Hustler Fund Regulations” correctly captures the mandate of cooperatives in the administration of the fund for the optimal benefits of Kenyans, while ensuring that possible threats that may be posed by such a role are minimized.
According to Mrs. Alice Kosgei who is the Kenya Highland Sacco CEO, the Sacco model will work best for the ‘Hustler Fund’ whereby the government should give the money to Saccos so that they can give out inform of loans targeting a particular group.
In this case Mrs. Kosgei noted that the government should consider the strength of the Sacco first before giving out the money, since it’s only Saccos to tailor made the product which will be geared towards the Hustler Fund because already Saccos have members who know the role of Sacco
“Channeling [the money] to Saccos is the best way and then Saccos does a product which is equivalent to what the government wants, and the money to be taken by members because we [Saccos] already we have those bottom-up people,” said Mrs. Kosgei.
She urged Saccos to get prepared to roll out the fund and correctly identify the target groups adding that the fund will have a very big impact in particular to Saccos if the money will be channeled through them since they will have been supported financially.
Her sentiments were supported by Mr. Antony Bitinyo Shiyonzo the CEO of Mudete Sacco Society, who stated that Saccos already have structures in place and most of the have already open up their common bond to accommodate even the ‘hustlers’.
According to Mr. Bitinyo the only issue which they will wait for clarification is who a ‘hustler’ is since up to now, they do not know who will qualify as a hustler and whether the current existing members in Saccos also qualify for the same fund.
“What we shall get clarification from the people who will be initiating the fund is who this ‘hustler’ we are talking about is? Is it the common mwananchi? Do our already existing members qualify for the same fund as ‘hustlers’ or we shall need to mobilize groups or initiate and try to come up with these particular groups in areas where Saccos already exist?” poised Mr. Bitinyo.
He added: “Saccos we are best placed to receive the funds and give it to the people who are qualified. The mechanisms are already in place, we have the loan products which already exist. The only thing is to adjust the loans and the interest they are talking about. But structures and mechanisms are already in place.”
Mr. Luncham Mugambi Nthigai who is the CEO of Trans Nation Sacco also echoes the same adding that Saccos are set because even as it stands now Saccos still serves the micro-groups and chamas and await for further directives from the government through the newly created ministry of cooperatives regarding the Fund.
“Saccos are best positioned that everybody else in this country [to roll out the fund] since we already serve groups, so from the onset we are ready and set. We will be guided on the issue of interest and security,” said Mr. Mugambi.
In his national address during this year’s Mashujaa Day celebrations President Dr. Ruto stated that the Fund will be launched on December 1, 2022 and that credit products will be available to small businesses on digital platforms at affordable rates to individuals and through chamas, groups, Saccos and cooperatives.
“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,” said Dr. Ruto.
In his manifesto President Dr. Ruto stated that his government will ensure that there is access to finance in transforming the Micro, Small and Medium Enterprise (MSME) economy, by committing Sh50 billion a year (which is a financial commitment of Sh250 billion from Financial Year (FY) 2022/23 to FY 2026/27; to provide MSMEs with 100 per cent access to affordable finance through SACCOs, venture capital, equity funds and long-term debt for start-ups and growth-oriented SMEs.
Highlight:
The Sacco players are stating that Saccos already have the necessary mechanisms to effectively administer the fund since they already have the ‘hustlers’ through opening up of common bond
