The Uwezo Fund plans to disburse Sh1.6 billion in loans during the Financial Year 2024/25 targeting youth, women, and people with disabilities to support business development.
This marks a significant increase from the Sh517 million distributed in the 2023/24 financial year.
Since its inception in 2013, the fund, managed at the constituency level, has disbursed a total of Sh7.8 billion, benefiting approximately 1.4 million households by providing affordable credit and offering capacity-building programs in entrepreneurship.
Cabinet Secretary, Ministry of Cooperatives and MSMEs Development, Wycliff Oparanya, urged the Fund’s management to innovate and diversify its products to meet current market demands.
Speaking at the Uwezo Fund Board members workshop in Kisumu County, Oparanya emphasized the importance of adapting to the changing environment and finding a unique market niche to attract borrowers.
‘The environment is changing, and you cannot continue operating under the same policies that existed ten
years ago. You must ensure compliance with the changes by being aware of the competing forces, and to establish a niche in a certain sector to attract specific groups,’ Oparanya advised the Fund Board members.
The CS also addressed the fund’s challenges, particularly the poor loan repayment history, which he attributed to the misconception that Uwezo Fund loans are politically motivated and therefore not meant to be repaid.
He suggested involving National Government Administrative Officers (NGAO) and Members of Parliament to raise awareness and improve loan recovery efforts.
‘You can use other state officials, the MPs, chiefs, and assistant chiefs to help debunk the notion that Uwezo is a political fund. The loans issued are meant to boost enterprise development and improve the living standards of the groups, hence they must be repaid to benefit others,’ Oparanya stressed.
He also pointed out that 15 MPs are yet to establish the Constituency Uwezo Fund Management Committees required to vet groups and faci
litate access to funds at the grassroots level.
‘There are 15 constituencies where money is lying idle because no committees have been formed by the patrons (MPs) as required by the regulations. These patrons are now denying their constituents opportunities to access these funds,’ he said.
Principal Secretary, State Department of Micro, Small, and Medium Enterprises (MSME) Development, Susan Mang’eni, speaking at the forum, revealed that the government has recovered over Sh46 billion out of the Sh57 billion lent through the Hustler Fund to approximately 24 million Kenyans.
She noted that the repayment rate for active borrowers is currently at 79% and warned that the loan defaulters risk being locked out of the credit market.
‘The Hustler Fund seeks to nurture individuals’ credit behavior to build up a credit rating that will be used by financial institutions to offer loans without any collateral,’ Mang’eni explained.
She added that the government plans to grade Hustler Fund beneficiaries, allowing those
with high credit scores to access loans from commercial banks based on their credit ratings rather than traditional collateral.
Globally, countries with strong economies rely on good credit ratings to offer loans, and Mang’eni emphasized that this is the culture the government aims to instill on every Kenyan.
She also mentioned that over 2 million Kenyans who were previously blacklisted by Credit Reference Bureaus (CRB) have been rehabilitated and now have excellent credit ratings, with the government working to transition them to higher loan limits.
Source: Kenya News Agency