Dormant Kenya National Entrepreneurs Savings Trust (KNEST) Plc has been handed a lease of life after being authorised to start managing Sh1.152 billion savings raised via the Hustler Fund programme.

The savings, which are projected to bulge, will be invested in government securities, progressively giving KNEST a footing in the pension industry to attain sustainability within three to five years.

KNEST, officially registered by the Jubilee regime in Feb 2022, will offer a pension scheme targeting informal workers under National Treasury-backed operationalisation.

The scheme has, however, been tailored to include the voluntary savers outside the Hustler Fund programme, successfully complementing the current National Social Security Fund (NSSF) that also accepts contributions from informal workers.

Government plans

The Hustler Fund is targeting to enrol 10 million individuals saving at least Sh10,000 every year, meaning KNEST could eventually have about Sh100 billion under its watch. Hustler fund saving is charged at a rate of 5 per cent of the amount borrowed.

Simon Chelugui (pictured), Cabinet Secretary for Co-operatives and MSME Development said the government plans to carry out a well packaged incentive designed to achieved maximum scale for all the people who are engaging in informal business.

“Our technical teams will now retreat and come up with a working relationship between the hustler fund and the trustee,” he said during the unveiling of KNEST Plc board of trustees that will be chaired by SBM Bank Kenya CEO Moezz Mir.

Other members include Joseph Wanjohi, Tom Okundi, Louis Karisa, Rachel Leyian, Martha Opisa, and Ruth Bungei. Former Treasury Cabinet Secretary Ukur Yattani had proposed in the last budget to have the State-backed pension scheme enrol 15 million informal sector workers, but the plan lacked implementation strategy.

President William Ruto’s administration is now planning to channel 70 per cent of every member’s savings channelled towards retirement benefits as the remaining 30 per cent is set aside to meet short-term financial needs.

There have been incessant calls to introduce reforms in the pension industry, especially around allowing partial withdrawal or shifting of accumulated benefits, to enable encourage saving that would spur the sector’s growth.