From critic to advocate: Oparanya revises his stance on hustler fund and advocates legal framework
If he receives approval, he plans to create a legal structure similar to the Fuliza, which would automatically reject borrowers once they fill their accounts with funds.
Cooperatives and Micro, Small, and Medium Enterprises (MSMEs) Cabinet Secretary nominee Wycliffe Oparanya has defended his previous opposition to President William Ruto's Hustler Fund program.
Oparanya was responding to a question by Suna East MP Junet Mohamed on his views about it, considering he has been one of its fierce critics.
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While he acknowledged his earlier criticism of the program, he explained that his views changed after receiving a comprehensive briefing from officials in the Ministry.
He, however, commended the initiative, suggesting that it has the potential to alleviate poverty if managed effectively. He added that the program was rushed without adequate legal frameworks.
“I know I was among the people opposed to the hustler fund. I had not known the facts until now when I have been briefed. I think, if well managed, it can take our people out of poverty. The only problem is that the funds were launched in a hurry without proper legal structures in place,” Oparanya said.
If approved, Oparanya plans to create a legal framework that functions similarly to the Fuliza system, which automatically recovers funds upon account replenishment.
“The Treasury allocated Sh13 billion to the Hustler Fund. From those Sh13 billion, because of borrowing, again and again, the turnover has gone to Sh55 billion. Out of Sh55 billion, 21 million people have participated in repeat borrowing. In the process, only Sh43 billion has been recovered. There is Sh12 billion unrecovered,” he said.
He noted that there is a robust digital infrastructure in place to track the unrecovered funds but stressed the need for a legal framework to address the issue.
“There is a strong digital infrastructure that can determine where the Sh12 billion is. The only problem is that there is no legal framework to recover that particular amount,” he said.
If he receives approval, he plans to create a legal structure similar to the Fuliza, which would automatically reject borrowers once they fill their accounts with funds.
“These funds were good because they were supposed to address market failures at the lowest level. If approved, the first thing I will do is ensure there is a proper legal framework. You know, when you take Fuliza and you load your phone, then the money is recovered automatically. I will develop that because the digital infrastructure they have waited until two weeks to do that,” he said.
In addition, Oparanya proposed establishing a board and hiring staff to manage the funds effectively.
“A board has just been put in, but there are no staff. So I will ensure there are staff that will manage this particular fund properly. The goal of these funds is that, when you borrow, 30 percent of the money goes to savings. So it encourages saving. At the moment, even the savings have reached about Sh3.1 billion. It also has the benefits of retirement benefits such as healthcare,” he said.
On November 30, 2022, President Ruto introduced the Hustler Fund, designed to assist 15 million Kenyans. The initiative aims to free people from the grip of exploitative lenders.
Ruto emphasised that the fund aims to promote a culture of saving, investing, and social security.
“We are establishing a culture of saving, investment, and social security,” he stated.
He also highlighted the government's commitment to creating opportunities for those at the lower end of the economic spectrum.
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