Hustler Fund will boost financial inclusion

President William Ruto interacts with vendors during the launch of Hustlers Funds. [Kelly Ayodi, Standard]

The Hustler Fund is a major boost to financial inclusion and empowerment of majority Kenyans to access credit. The fund also heralds a new era by according all Kenyans an opportunity to contribute to their pension.

The Fund could not have come at a better time especially as small businesses bear the impact of prevailing tough economic conditions. There is no doubt on the need for credit, however, access and cost of credit are two key barriers to majority of MSMEs who need funds to grow their businesses. The ripple effect has been rising unemployment as companies struggle to meet cost of inputs, while lower-income households have been hit by high cost of food. The government’s commitment to provide a financial solution that will enable millions of Kenyans contribute towards nation building, is therefore a great way to situmulate social and economic progress. The masterstroke of the fund is perhaps its use of ICT. Technology is an essential driver of economic progress that benefits the country in totality. The internet, mostly accessed via the mobile phone, has opened new revenue opportunities for entrepreneurs, thus enhancing their livelihoods. There are many advantages Mobile Network Operators (MNOs) offer on innovations and financial services such as the Hustler Fund.

At Safaricom, we know the transformative power of the mobile phone, a tool for economic development, an enabler of innovation, and a foundation for modern day pioneering solutions. The mobile phone will continue to be a key highlight in innovation and development in Kenya and beyond.

As such, I was encouraged by President William Ruto’s recent comments that Kenya will manufacture the cheapest smartphone in Africa, adding that an affordable smartphone will ensure Kenyans access digital platforms for economic empowerement and government services. Single-handedly, the mobile phone has driven financial inclusion in Kenya, catapulting it from single digit at the turn of the century to over 85 per cent now. Through mobile money, many individuals have lifted themselves out of poverty and contribute positively towards nation building.

MNOs will provide the network and technology foundation to operationalise the Hustler Fund, with over 97 per cent of the population covered by 4G network. The fund will also be delivered entirely electronically on mobile money, via Hustler Fund mini-app available on M-PESA Super app or USSD *254#, with M-PESA, T-Kash and Airtel Money providing the platforms. MNOs also offer direct access to a large customer base, including the harder-to-reach segments of the underbanked and unbanked. According to a Statista report, as of 2021, approximately 11 per cent of Kenya’s adult population was financially excluded, with no access to bank accounts or banking services.

Adoption is also likely to be high due to MNOs offering benefits such as ease of use, as majority of Kenyans are comfortable with, and have trust in mobile devices as a secure and simple transaction platform. Such partnerships will spur the economy and deliver substantial benefit to our citizens. MNOs providing the network and platform, and government providing credit that is accessible at affordable costs to all. Our role in making Hustler Fund a reality therefore, demonstrates our commintment to grow partnerships that help to unlock growth for Kenyans by combining complementary solutions between mobile operators and banks for the benefit of the public.

One of the biggest component of the Hustler Fund structure is that it’s not just a credit facility, but a savings vehicle too. The customer’s mobile money wallet will receive 95 per cent of the requested funds, while the remaining 5 per cent will be allocated to a savings plan. The 5 per cent will be split between long-term and short-term savings. Of the 5 per cent disbursed, 70 per cent will be micro-pension with a government matching of 2:1 as 30 per cent go into investments.

We look forward to mutual partnerships to bridge the digital divide by providing solutions.

-The writer is Safaricom CEO