The launch yesterday of the Hustler Fund marked a defining moment for President William Ruto's administration, which has promised affordable credit for small businesses.
That small business will now be able to apply for small loans using their mobile phones without the traditional bureaucratic processes is laudable.
At 8.0 per cent, the interest on loans disbursed from the Sh50 billion Hustler Fund should also be significantly more bearable for the segment of borrowers who have been struggling with repaying digital loans offered at annualised rates of up to 520 per cent through predatory apps.
But the government should avoid pitfalls, including massive embezzlement and mismanagement, that undermined other similar initiatives such as the funds for women and youth.
The chronic failure of past affirmative action funds to achieve their goals calls for more drastic measures for the Hustler Fund than threats of fines, imprisonment and forcible debt collection.
As the government starts to roll out the programme, it needs to keep out the cartels and ensure the right people benefit and the money is disbursed with minimal operating costs.
Let us not have a situation where most of the money allocated to the fund will be used for administration.
Also, a lot of borrowers in the past have failed to repay loans extended to them because the awarding agencies failed to put in place strong credit appraisal measures.
For the Hustler Fund to pass the sustainability test, the money should be advanced to borrowers with good credit scores to minimise defaults.
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