Co-operative Bank says it is ready to provide savings and credit co-operative societies (saccos) with its lending models to help the thrift institutions manage credit risk better.
This is after President William Ruto said that he will officially roll out the Sh50 billion annual Hustlers Fund programme on December 1, 2022 that Kenyans interested in borrowing funds from the programme will have to organise themselves into registered groups such as SACCOs.
“The saccos structure meets the requirements of successfully handling the hustler fund in terms of financial access, traceability, inclusivity, affordability and overall sustainability of the fund,” Co-op Bank’s chief executive Gideon Muriuki said.
Ruto’s administration has committed to providing loans to small firms such as motorcycle transport operators and women-owned ventures at single-digit interest rates without collateral.
Those seeking to access the funds as individuals will have to go through rigorous vetting to avert fraud and the loss of the monies.
“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 Ruto.
According to data by the World Bank, Kenya has about 7.4 million small and medium enterprises that employ some 4.9 million people in various sectors of the economy.