Simon Chelugui tells how he will roll out Sh50b hustler fund

CS nominee Cooperative and MSMEs Simon Chelugui takes an oath during the vetting by the Committee of appointments. [Kelly Ayodi, Standard]

Cooperatives and SMEs Cabinet Secretary nominee Simon Chelugui on Saturday sought to explain Kenya Kwanza government's plan to administer the Sh50 billion hustler fund.

Mr Chelugui was before the parliamentary Committee on Appointments led by Speaker Moses Wetang'ula for vetting. When he declared his net worth as Sh993 million, he was asked to explain the increment by Sh200 million in five years. He responded by saying his wealth grew by Sh197 million between 2018 and 2022 from appreciation in the value of his assets.

Kikuyu MP Kimani Ichungwa and Kathiani MP Robert Mbui had tasked Chelugui to explain how his net worth rose from Sh796m he declared on February 13, 2018, to Sh993 million. In 2018, Chelugui was vetted for Water and Sanitation Cabinet Secretary in Retired President Uhuru Kenyatta's administration. Chelugui, one of the only two CSs retained from Uhuru’s Cabinet, said the assets he declared in 2018 are the same ones he declared.

“Majority of these assets have appreciated in value. They include land and buildings whose net value has gone up over the last five or so years,” Chelugui told the MPs.

Ghosts of Itare dam project also returned to haunt him after the committee sought to know his involvement in the same while serving as Water CS and subsequent summoning by the DCI.

Summons by DCI

“It is true I was summoned by DCI over the Itare dam project. I was able to demonstrate to the investigating officer how this project was conceptualised, how it was managed, and at what stage I came on board,” he said.

He explained that tenders were floated in 2013 and in 2015 and the project awarded to an Italian Company CMC di Ravenna. The implementing agency, he said, was Rift Valley Water Works agency.

“I was, however, appointed in 2018. At this point, this company was experiencing financial difficulties but after I summoned the contractor, they committed to continue with the project. One month later the company was put under receivership,” he observed.

He was also queried over the stalled sewerage systems in Kikuyu, limuru and Gatundu which began under his tenure as Water CS.

“By the time I left we had done 60 per cent. I may not take responsibility for the continuation of the projects thereafter but I think they are important projects and we will support the incoming water CS to complete them," he said.

The legislators also sought clarity on the hustler fund actualisation, administration and feasibility in not only alleviating poverty but also being an economic tool to steer the country. Deputy Speaker Gladys Shollei asked Chelugui how he will avoid duplicity given there were other affirmative action funds such as the Uwezo fund, Youth fund and the Women fund. She also sought to know how the target groups would receive the funds.

Chelugui explained that hustlers fund would be established through the Public Finance Management Act, and his ministry would then originate the documents, policies and guidelines and share them with the relevant House committees and Parliament. The second stage, he said, will be to group the hustlers. They will be grouped into societies, Savings and Credit Cooperatives Societies (saccos), and even in Chamas. The third stage will be training and building capacity among the hustlers which will be followed by availing financial support, through the intermediaries such as banks, saccos, and fintech organisations.

He explained that for individuals borrowing the funds, the Government will use credit scores to determine qualification as opposed to security and collateralised borrowing.

“We will begin with small borrowing; you can apply through your phone. We will have a platform. we will be working with such as Safaricom, Telkom and Airtel, and other technology companies. Those that qualified will be enumerated either digitally or physically and we will work with other ministries to register the potential beneficiaries of this fund,” said Chelugui.

He revealed that the Kenya Kwanza administration will sign an MoU with banks and other intermediary organisations such as saccos to lend and recover the money.

“The rate we are going to agree will be single digit, there will be provision for the administration of the funds. There will be an interest for the intermediary. we will also strengthen our cooperatives saccos and how they are managed,” added Chelugui.

Kilifi North MP Owen Baya questioned the success rate of other funds such as Uwezo. “History is clear that the repayment of these funds has been a major issue. The highest repayment per cent rate is on average 40. People use the money to buy food and not invest. How different will this Hustler fund be?” posed Baya.

To which Chelugui answered: “The affirmative funds have been in existence for a while but have not achieved the desired results. This time round, we are making an additional intervention to ensure Kenyans get access to credit.”