The latest figures from the government show that over 1.3 million Kenyans have so far been registered for the Hustler Fund, with more expected to onboard as time goes by.
The fund has set aside Sh50 billion to provide cheap credit to micro and small enterprises. It will give the beneficiaries access to financing at an eight per cent pro-rated basis or a daily rate of 0.002 per cent.
The loans, to be accessed via a USSD code, will start from a minimum of Sh500 and a maximum of Sh50,000 for individual borrowers.
When one borrows from the fund, the approved loan will be disbursed to their mobile money account where out of the total approved loan amount, 95 per cent shall be deposited to the mobile money wallet.
The launch of the hustler’s fund provides a great opportunity to different players in the micro and small enterprises sector that have suffered financial exclusion over the years, making them vulnerable and unable to invest in health and social welfare.
For starters, let us focus on the local transport sector dominated by over 1.2 million boda-boda riders. According to a study by Car and General, each boda boda rider makes an average of Sh1,000 per day from an average of 15 rides, translating to a daily income of Sh1 billion or Sh365 billion every year.
Over the years, boda-boda riders have lacked access to proper financial services and have ended up being duped by unscrupulous people under the guise of investing their money.
The sector has a great opportunity to benefit from the hustler fund via the e-wallet feature which is part of the e-driving licence being rolled out by the Kenya Government.
Currently, only 300, 000 riders have registered for the licence.
Unlike conventional driver's licenses, the electronic permit can serve as a platform for a wide variety of payment and non-payment services, including fines, insurance claims, insurance premiums, buying spare parts and toll payments, etc.
The e-wallet, a special feature in the e- driving licence, can be used to tap into financial services. With proper integration and mutual cooperation, the hustler fund can tap into the boda boda market by offering a platform for the riders to access the e- driving licence by financing the fee per annum and then recovering it over a spread-out period.
The same e-wallet can also be used to create a platform for offering insurance cover for both the motorbike and the rider which can be bundled up as a product combo through the Hustler Fund accessible every year.
Riders stand to benefit by earning cash points or rewards for various activities such as zero claims from fueling stations, repayment styles, savings styles and so on.
Another group that can benefit through the e-licence are Uber and chap chap drivers. The same model can be replicated in other sectors such as the crafts industry, and mama mboga.
For this to work, there is a need for heightened financial awareness and education for the boda boda lobby and the other organized groups by the government.
