OPINION: Slum residents must not be left behind in financial inclusivity
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 Ksh.10,000 and Ksh.200,000 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 for those at the lower end of
the pyramid.
It is a journey I have been on 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 the 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 Ksh.550 million, which 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 the 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 Ksh.500, 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, Ksh.500 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 the 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 per cent of Kenyans live in informal
settlements, as per the 2019 National Population Census, with 60 per cent of
Nairobi’s population domiciled in the slums. These are huge numbers and I wish these
institutions knew what they are missing out on.
Dr. Kennedy Odede, is the founder and CEO of Shofco, a
member of USAid Advisory Board, World Economic Forum Young Global Leader,
multiple humanitarian award winner, including 2022 Schwab Foundation Social
Entrepreneur of the Year, best-selling author. Twitter @KennedyOdede
Want to send us a story? SMS to 25170 or WhatsApp 0743570000 or Submit on Citizen Digital or email wananchi@royalmedia.co.ke
Comments
No comments yet.
Leave a Comment