Deploy all effors to ensure Hustler Fund succeeds
By PD columnist, October 11, 2022There is little to write home about the Government empowerment funds to date. These funds, among them the Youth Fund, the Uwezo Fund, and the Women’s Fund, have simply been a sink into which billions of shillings of taxpayers’ money have been drained.
These funds were set up to fail. And they have failed!
The Hustler Fund is the most awaited Government promise by Kenyans in recent times, up there with the free primary education. President Mwai Kibaki shepherded the free primary education to spectacular success. It is possible for President William Ruto to do likewise with the Hustler Fund.
But the thinking that will set up the Hustler Fund must be very radical. All the lessons needed to set up and run the Hustler Fund successfully can be picked from the ashes of the subsisting empowerment funds.
One, appoint patriotic fellows in management. The huge scandals surrounding the youth fund, and the foreign junkets that the directors of these entities have over the years splashed money on, are just pointers of a disjointed cabal that had no idea why they were appointed in the first place. A robust vetting exercise must be undertaken for directors and managers of the Fund, complete with declaration of wealth.
Further, appoint people who have experience in business, not colourless bureaucrats whose default stance is hostility toward business.
Two, the Hustler Fund will not undertake any procurement. This is a financing agency- period. The Youth Fund has spent hundreds of millions procuring such things as motor bikes and green houses. It is not up to the directors to decide what business people should invest in.
Three, undertake serious follow up of beneficiaries. The Hustler Fund must make it very clear that these loans must be repaid, albeit with a low rate of interest. It must enforce financial discipline. Beneficiaries should also be trained regularly to impart business skills.
The Hustler Fund gives the Government a great opportunity to instil financial discipline and the saving culture it craves among the population. It should not waste it.
Four, and this is the crux of the matter. The Hustler fund must design very creative products to address the needs of the cross-section of micro, small and medium enterprises. Some businesses need working capital, others LPO financing, some equipment purchase, and some money to fund stock. It must be open to all irrespective of age.
Five, the Government must overhaul its payment systems. Going forward, it must ban pending bills. In the days of President Kibaki, payments were automatic. The country must go back to those days. If the government continues with its current notoriety of not paying suppliers and running up billions in pending bills, the Hustler Fund is doomed.
Six, use this as an opportunity to formalise all businesses in Kenya. Every beneficiary must at least have a business name. The same drive and energy that the Government used to get Kenyans to register for Huduma number can have this achieved in next to no time.
Seven, make it mandatory for the Hustler Fund management to submit a progress report to Parliament every six months. The Fund must also be subjected to an annual audit by The Auditor-General.
Eight, institute a threshold for graduating from the Hustler Fund. When the financing needs of a business rise beyond a certain threshold annually, it should be “handed over” to the formal banking system. Transitioning arrangements with microfinance institutions should be put in place. The Hustler Fund must act as a primary level financier.
If well managed and deployed, the Hustler Fund will drastically change Kenya. President Ruto must put the full authority of his office behind the Hustler Fund to keep the feet of those running it very close to the fire.
But if the trajectory that the Hustler Fund assumes is that of the funds that are currently subsisting, it is doomed to failure. So, the message to President Ruto’s government, do not set up the Hustler Fund to fail.
— The writer can be reached on gathukara@gmail.com