President William Ruto on Monday, April 8, announced that his administration would make changes to the Hustler Fund to make it Shariah-compliant.
The Head of State who was speaking during the Iftar dinner held at State House, Nairobi, revealed that he was acting after receiving requests from Muslim leaders.
Ruto equally tasked Muslim leaders to draft a proposal on how to make other financial products offered by the government Shariah compliant.
“The way the financial system has been packaged, not many Muslims can access it. It is the first time I have received that request and I want to guarantee I will process it to make sure Hustler Fund is Shariah compliant so other Kenyans can benefit,” Ruto promised.
Over seven million Kenyans have benefited from the Huster Fund and the President reckons that the move would increase that number further.
“We will also adjust other Government financial instruments to comply with the Islamic Law,” he added.
The Hustler Fund is advanced to individuals and organisations to engage in entrepreneurial ventures.
Ruto’s promise to recalibrate the Hustler Fund is most likely to target groups registered under the Micro and Small Enterprises Authority (MSEA) who apply for the facility.
The groups are advanced loans ranging from Ksh20,000 and Ksh1 million at an interest rate of 7 per cent per annum.
Interest rates are one of the key contentious issues in Shariah Law as it is largely considered exploitative.
While Riba (Interest) is declared unlawful in the Muslim community, there is an exception for Murahaba which is a cost-plus financing.
In Murahaba, both parties agree to the cost and markup of an asset which in some cases is calculated to the value of inflation to compensate lenders for the time value of their money, without creating excessive profit.
