Deploy business loans to boost flow of cash
By Editorial.Team, October 24, 2022That the government has signalled its intention to deploy the Hustler Fund by December 1 is a move in the right direction given that many small businesses are in need of fresh cash injection after the strains caused by the two years of slow business during the Covid-19 pandemic.
Indeed, even as this is being done, Treasury should also consider a stimulus package for companies that are yet to weather the pandemic storm and which are still struggling to return to profitability. Policy makers should create special packages for various industries, including banks, one of which is said to be going through troubled waters, necessitating interventions by the Central Bank of Kenya to keep its doors open.
As American bail-out of banks and the motor vehicle industry in the past has demonstrated, keeping companies open in times of financial crises not only safeguards jobs but also makes the firms stronger once they ride out of troubled waters. Kenya now finds itself in a situation where the government will need to inject some money into the economy, first, to ensure cash flow and second, to create opportunities for businesses big and small to create job opportunities.
There are too many young people who are wasting away due to lack of opportunity to be gainfully employed, even in casual and entry level jobs that pay minimum wage. This is a crisis that needs to be addressed urgently so that these young people can become useful citizens and, at the same time, turn around their lives especially in regions where alcohol and drug abuse stemming from unemployment are rife.
Secondly, the government has shown keen interest to develop a savings culture in Kenya. This can only happen when citizens at all levels of economic activity get an opportunity to earn incomes that are above inflation. Only then can such individuals develop a savings culture. Policy makers would also do well to study this year’s winner’s of the Nobel Prize for Economics, because, among other things, they have demonstrated that for the economy to function, savings must be channeled to investments.
Once Kenyans develop a savings culture, deliberate measures should be taken to encourage them to take up investment opportunities in such platforms as the stock exchange, small businesses, talent development and other avenues that can help them to generate incomes. This will insure cash flows in the economy, which will, in turn, increase general wellbeing and give more Kenyans a hand-up out of poverty.