Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya has defended the government’s micro-enterprise support programmes while acknowledging that loan defaults under the Hustler Fund remain a challenge, saying the state is now relying on ID-linked recovery systems to track borrowers and improve repayments.
Appearing before the Senate Plenary on Wednesday, Oparanya said the government had rolled out several interventions through state agencies to strengthen Micro, Small and Medium Enterprises (MSMEs), including grants, market access programmes, digital transformation initiatives, industrial development centres and modern market infrastructure.
“We do not segregate any region,” he told senators. “We have officers all over the country who ensure that these groups are put together, registered and trained.”
The Cabinet Secretary said one of the government’s flagship programmes, the Hustler Fund, has so far reached more than 27 million Kenyans through collateral-free digital loans of up to Sh150,000.
Introduced in November 2022 under President William Ruto’s Kenya Kwanza administration, the fund was designed to expand financial inclusion and provide affordable credit to people excluded from conventional banking systems.
Oparanya told senators that the fund offers loans at an annual interest rate of 8 per cent, rising to 9.5 per cent for repayments delayed beyond 14 days, with borrowers accessing higher limits based on consistent repayment behaviour.
He, however, acknowledged that some beneficiaries initially defaulted after receiving loans, prompting the government to intensify awareness campaigns and borrower follow-ups to improve repayment rates.
“The scheme is designed to cushion small traders through affordable credit,” he said, adding that the government was also addressing early-stage defaults through ID-linked recovery systems. “If we want to follow them legally, we have ID numbers because the borrowing is attached to ID numbers, so all is not lost.”
The CS also said Kenya Industrial Estates provides loans to small businesses involved in machinery acquisition and rural industrialisation at interest rates of about 10 per cent.
Oparanya further highlighted the role of the Uwezo Fund, a state empowerment programme launched in 2013 and operationalised in 2014 to provide interest-free financing and entrepreneurship support to women, youth and persons with disabilities.
The programme was established to improve access to finance at constituency level and promote self-employment among vulnerable groups.
According to the Cabinet Secretary, the Uwezo Fund has disbursed about Sh197 million to 2,212 groups, including 1,389 women groups, 745 youth groups and 78 groups representing persons with disabilities.
He added that more than 35,000 individuals had benefited from entrepreneurship and financial literacy training under the programme.
“The fund provides training of the beneficiary groups before they are issued with loans,” he said. “This builds entrepreneurship skills and enables groups to take advantage of procurement opportunities provided through access to government procurement opportunities.”
Oparanya also told senators that the government is using the MSME Connect platform and regional trade fairs to improve market access and support cross-border trade for small businesses across East Africa.