Trade, Industry, and Cooperative MPs have urged the State Department for Micro, Small, and Medium Enterprises (MSMEs) Development to raise awareness about the affirmative action funds available to the public to enhance their uptake.

Chaired by James Gakuya (Embakasi North), while speaking during a consultative meeting with officials from the Cooperatives and MSMEs Development Ministry led by CS Wycliffe Oparanya, observed that many Kenyans have limited information on the funds.

The Uwezo Fund and the Financial Inclusion Fund (FIF), commonly known as the Hustler Fund, are among the affirmative action financing programs overseen by the State Department.

“Many potential beneficiaries have limited access to information about these funds, which has hindered their full utilization,” said the committee chairperson.

Gakuya, reacting to reports that more than half of the beneficiaries of both Uwezo Fund and Hustler Fund loans have defaulted on their repayment, attributed this to a lack of sufficient information.

“It is ironic that other digital lenders who offer loans at higher interest rates are thriving with fewer defaulters compared to the Hustler Fund. The Ministry must examine what other industry players are doing differently,” he said.

Committee Vice Chairperson Marianne Kitany of Aldai, while adding her voice to the matter, emphasized the importance of utilizing local leaders to disseminate information about the funds.

“Many of us leaders have strong platforms at the grassroots level through which we can share information about the funds. The issue is that we have not been adequately engaged,” said Kitany.

During the session, CS Oparanya reaffirmed the Ministry’s commitment to the Bottom-Up Economic Transformation Agenda (BeTA) and stressed the role of the Uwezo Fund as a key component of this vision.

He noted that the Uwezo Fund has been instrumental in supporting groups such as cooperatives, women, youth, and persons with disabilities and has expanded its reach through decentralized financial support.

“The Uwezo Fund remains the most practical tool for advancing priority value chains and promoting sustainable community development,” he stated.

Earlier, Anne Njuguna, the Chairperson of the Uwezo Fund, updated MPs on the fund’s progress, revealing that funds have been disbursed to 82,583 groups across all 290 constituencies.

She informed the lawmakers that the fund’s repayment rate stands at Ksh 3.07 billion, which represents a low 41%.

“The high level of non-performing loans is hindering the realization of the fund’s mandate,” she explained, attributing the problem to the misconception that the fund is a grant.

In addition to discussing the affirmative action funds, the committee also reviewed the Proposed Revision of Uwezo Fund Regulations (2014), Business Model Re-engineering, and the Start-Up Bill 2024.