Borrowers who have been making timely payments of the Hustler Fund mobile loan will access higher limits in the second phase to be rolled out next month.
Cooperatives and Micro and Small Enterprises Cabinet secretary Simon Chelugui said the plan to unveil lending through groups and savings and credit cooperative societies (saccos) is on course.
Speaking during Yetu Sacco’s annual general meeting in Meru on Wednesday, Mr Chelugui said more than Sh15.9 billion in loans had been disbursed, adding that more than 18.4 million Kenyans have subscribed to the Hustler Fund and repaid over Sh7.7 billion since its inception.
He said 5.6 million subscribers have borrowed multiple times pointing to the growing demand for the credit facility.
“We are finalising development of the second phase of the Hustler Fund that will see borrowers access between Sh100,000 and Sh2.5 million.
“We are encouraging saccos to apply to disburse the funds in the second phase,” said Mr Chelugui.
His Agriculture counterpart Mithika Linturi and Cooperative PS Patrick Kilemi accompanied him.
Mr Chelugui said President William Ruto’s administration was keen on expanding the cooperative sector by supporting the establishment of cooperatives at the ward level.
He said as part of the effort to boost the saccos, plans were at an advanced stage to include them in the national payment system as well as establish a central liquidity system.
“So far, about 52 out of the 360 saccos under Sasra have shown interest in having a central liquidity system. This will enable saccos clear cheques among themselves without using banks. We are also working on a credit guarantee scheme to protect members from any eventualities,” Mr Chelugui said.
“I urge saccos to diversify their products and support the government housing project to close the gap in the housing sector. Saccos can work with the Kenya Mortgage Refinance Corporation to access affordable financing for their members.”
He advised saccos against transforming into banks, saying such a move is not in the interest of shareholders.
Yetu Sacco, which has more than 60,000 members, declared dividends of 18 percent and rebates of 13 percent for 2022. Cooperative leaders called on the government to relook at the taxes levied on saccos terming them hefty.