The government has published regulations that reveal how the Hustler Fund will be run days after the loans disbursement crossed the Sh10 billion mark..
The regulations, to be known as Public Finance Management (Financial Inclusion Fund) Regulations, 2022 establish an eight-member Advisory Board including, a non-executive chairperson appointed by the President, the Principle Secretaries for National Treasury, State Department for Micro, Small, And Medium Enterprise (MSME) Development and State Department for Co-operatives.
The Advisory Board, which shall provide oversight on the administration of the Hustler Fund, shall also consist of three other persons who are not public officers, and the Fund’s administrator who will be an ex-officio member.
There will also be the chief executive officer, to be appointed by the Cabinet Secretary in charge of MSMEs, currently Simon Chelugui.
President William Ruto intends to use the Hustler Fund to offer cheap loans to individuals and businesses at the bottom of the pyramid that have struggled to access credit from commercial banks.
“The capital of the Fund shall be as appropriated by the National Assembly or from any other source provided for under regulation 4 of these Regulations,” reads part of the regulation.
The National Treasury will table before the National Assembly the first supplementary budget estimates for the Financial Year 2022/23, and it is expected that the Hustler Fund will be included in the mini-budget.
There have been questions over how the Fund, which has already started disbursing personal loans ranging from Sh500 and Sh50,000, has started operating without a governance structure in place.
Early this year, two civilians, Bernard Odero Okello and Kevin Ndoho Macharia, moved to court requesting it to declare Sh50 billion kitty illegal and an avenue to loot public coffers as
The government’s decision to create the Sh50 billion Hustler Fund has been challenged in court by two civilians who claim that the kitty is illegal and an avenue to loot public coffers.
They argued that the government was yet to appoint a board of directors to oversee the Hustler Fund and a Chief Executive Officer as required by the Public Finance Management (Financial Inclusion Fund) Regulations, 2022
Consequently, they wanted the court to suspend the implementation of the fund and disbursement of loans pending the determination of the lawsuit filed at the High Court in Milimani Nairobi.
They claimed that the ongoing disbursements are unlawful because the government is yet to appoint a board of directors to regulate the Hustler Fund and a Chief Executive Officer as required by the Public Finance Management (Financial Inclusion Fund) Regulations, 2022.
“There has not been any establishment of a board contemplated under Regulation 10 of the regulations by the cabinet secretary. Further, the cabinet secretary has not appointed the Chief Executive Officer under regulation 14(1),” says the petitioners.
Qualifications for the chairperson of the Fund include having a university degree in a relevant field from a university recognised in Kenya; ten years of experience in management and knowledge in one of the fields including finance, accounting, economics, law, enterprise development, cooperative development, business management and strategic management, ICT is also a requirement.
He or she is also supposed to meet the requirements of Chapter Six of the Constitution on integrity.
Government officials told the International Monetary Fund in a letter that the establishment of the Hustler Fund was expected to “heavy private sector participation with limited budgetary implications.