President William Ruto launched a new digital financial inclusion initiative called Biashara loan three weeks aimed at enabling micro-SMEs access to loans at low interest rates.
The Biashara loan is part of the Hustler Fund Personal Loan Product, which is a revolving fund that provides credit to small businesses and individuals who have no collateral or formal banking history.
The individual micro enterprise loan product launched will lend between Sh10,000 and Sh200,000 at seven per cent interest calculated pro-rata or daily.
I want to laud the government for making these giant steps in an effort to ensure there is financial inclusivity to those at the lower end of the pyramid.
It is a journey I have been onto for the past five years trying to ensure that a population that had lost hope in life because they could not access credit due to lack of collateral or a pay slip are empowered to realise a larger economic transformation.
As someone who grew up in Kibera slums, I saw the injustice. We were not part of the economy and yet people in the slums are really working hard but they are not being recognised.
That is why I came up with an idea of financial inclusivity. I asked myself, how could we bring people living in the slums to have their own Sacco? Because Saccos are really tricky, they are mostly a preserve of salaried people or those with big businesses. If you are mama mboga, a carpenter or mtu wa mjengo, Saccos try to run away from you.
Because of that, an idea was born five years ago to have a Sacco for hustlers, those who live at the bottom of the pyramid. That is how Shofco Sacco was launched. It was a big risk but right now, this Sacco has over 12,000 members and has given out Sh550 million, that is half a billion gone out to members in form of loans.
For me that is amazing, this is not donors or investors’ money but rather Sacco shareholders and members’ contributions and I have seen people buying their own Uber from the slum, pay school fees, women who were selling tomatoes now have wholesales.
The biggest thing I have seen is dignity. Money is power and to have access to capital is also power. People feel like they have dignity and a sense of worth. It is not something we can take lightly given how the poor are marginalized and forgotten in Kenya for lack of connections.
I am happy that government has realised the true potential that lies among the poor and the newly-launched loan product should not lose sight of how to empower this demographic since even the Sh500, seen as small by some, can be the difference between restoring one’s dignity through a small business.
Imagine the guy who sells you sugarcane on the streets, Sh500 could just be enough for such a person to start a business and if he has focus and vision, he could be selling sugarcane juice in a matter of months.
Nothing then prevents him from turning it into a processing plant in future that will not only lift him but also provide employment to other slum dwellers, a good way of empowering the downtrodden.
It is a great lesson on financial inclusivity not just for government but for the financial institutions who have always shunned the slum community.
There exists a lot of wealth within this group and it is high time banks came up with tailor-made products to tap into it or keep losing out.
What’s more, over 46 percent of Kenyans live in informal settlements, as per the 2019 National Population Census, with 60 percent of Nairobi’s population domiciled in the slums. These are huge numbers and I wish these institutions knew what they are missing out on.
