Kenya’s robust Chama culture set to anchor the Sh50 billion Hustler Fund
When then Deputy President William Ruto mooted the rollout of a national fund to provide small traders with affordable credit during election campaigns, skeptics viewed it as a novel publicity message simply meant to entice the masses.
In recent weeks, however, the ‘Hustler Fund’ has repeatedly been featuring in President William Ruto’s addresses, raising hopes among individuals, Saccos, and Chamas that the government-backed business capital is discernibly in the offing.
Over the weekend, the president touched on his plan once more during his trip to Kirinyaga Country, urging interested parties to organise themselves in Saccos, cooperatives and chamas to prime themselves for ‘Hustler Fund’ disbursement starting December.
“We agreed on having a Hustler Fund which will reduce the cost of credit so that everyone can access loans on fair terms. I assure you that [the hustler fund] will be ready by December, this year,” Dr Ruto said.
Further, he assured members of the public that credit seekers affiliated to chamas or similar organisations will be exempt from collaterals to secure Hustler loans, maintaining that such clusters made for borrowers’ sureties.
In Saccos and Chamas, the government has picked out a potent mechanism that will tap into its bid to enhance credit accessibility to Micro Small and Medium-sized Enterprises (MSMEs).
Already, Co-op Bank Group CEO Gideon Muriuki has challenged the government to utilise the over 13 million members in more than 22,000 co-operative societies and Saccos, adding that the networks can be effectively distribute the fund.
Read also: Kenya’s economic growth tapers off to 5.2% on drought and high inflation
Mr Muriuki said the model of Saccos can handle the hustler fund in terms of traceability, inclusivity, affordability and overall sustainability of the fund and appealed to member movements to take advantage of incentives given by the government to participate in the lucrative capital market place.
Chama is used to describe self-help groups. Over the years, many Kenyans in the informal sector have formed chamas where they contribute an agreed amount of money with the aim of helping each other grow economically and possibly achieve financial independence.
The groups are driven by the members’ desire to belong with most Kenyans being members of at least one or two chamas. Chamas may consist of former classmates, colleagues at work, neighbors, friends and relatives.
The President implored Kenyans to partake in these organizations for which his government will form a special ministry.
“I have set up a special ministry for cooperatives, SMEs, Chamas, and saccos because its the only way to disburse credit at low costs. So, when I’m planning on dishing the money out, get ready to receive the money,” he said.
“The money that will be borrowed from the Hustlers Fund will strictly be used by the small and medium enterprises to upgrade their businesses. Let no one think that the government will give them free money, there has never been free funds from the State. If you borrow money from the Hustlers Fund, you’ll plunge it into business, and refund the government at an interest rate below 10 per cent per annum,” said President Ruto on Sunday in Kericho County.
