A section of digital lending platforms expressed concern over President William Ruto's directive to increase Hustler Fund to Small and Medium Enterprises (SMEs) in the second phase.
On Tuesday, February 21, mobile lenders lamented that extending and increasing the limits for players in the SME sector would affect their bottom line.
The concerned managers noted that in the long run, they would face stiff competition from the fund, thus compelling them to restructure the business models or even exit the Kenyan market.
"However in the future and the President has spoken about laddering which is basically increasing the limits," one of managers of the mobile lending platforms stated.
"If we see then that this starts growing into Ksh5,000 to hit even Ksh50,000, then yes, it will come into our space and of course the impact the customers that we serve," one of the managers of the digital lending platforms explained.
Their sentiments came just days after government announced plans to disburse up to Ksh2.5 million for small traders in March 2023.
Co-operatives and SMEs Cabinet Secretary, Simon Chelugui, explained that the loans would be disbursed through saving and credit co-operative societies (Saccos) and commercial banks.
"The second phase of the Hustler Fund microloan product that we shall roll out at the end of February 2023 will have borrowers access between Ksh100,000 and Ksh2.5 million and will be done mainly through banks and Saccos,” Chelugui stated.
"By leveraging on such programmes and initiatives, Saccos can provide even more support to MSMEs and help them access the financing they need," the CS added.
The introduction of Hustler Fund came after the government approved 22 digital lending platforms to operate in the country.
Fresh registration was introduced to growing concerns by the public about predatory practices.
Borrowers also raised concerns over unethical debt collection practices and abuse of personal information, compelling the government to start regulating the sector.
Public and gaming firms were also sent back to the drawing board after President William Ruto formed a task force mandated to establish the National Lottery.
In a gazette notice dated Friday, February 17, Ruto appointed Devki billionaire, Narendra Raval to lead the 25-member presidential taskforce.
Despite staing that the proceeds will contribute towards good causes and ameliorate the plight of persons in need, analysts argued that the National Lottery and Public and gaming firms will compete for a share of the cake.
