Cooperatives Cabinet Secretary Wycliffe Oparanya has announced that the government is set to merge several state-run financial institutions that provide loans into a single entity to improve efficiency and curb misuse.
Speaking in Khwisero, Kakamega County, on Friday, March 21, Oparanya revealed that the government plans to combine the Uwezo Fund, Youth Fund, and Women Enterprise Fund into one entity called the Biashara Fund.
This move will integrate these funds into President William Ruto’s flagship Hustler Fund, which already provides credit to small businesses and individuals who lack collateral or formal banking history.
Why the Government is Merging the Funds
Addressing residents, Oparanya explained that consolidating the three funds into Biashara Fund would help streamline access to financing for small businesses while preventing individuals from exploiting multiple loan opportunities unfairly.
He emphasized that the move would eliminate loopholes that have previously led to misuse, ensuring fair allocation of resources and preventing cases where one person benefits multiple times at the expense of others.
“There are people who take a loan from the Youth Fund while they are young, then later apply for another loan from the Uwezo Fund. To prevent such cases, the government has decided to merge these funds into one,” Oparanya stated.
“Very soon, the Uwezo Fund, Youth Fund, and Women Enterprise Fund will be consolidated into the Biashara Fund, making it easier for Kenyans to access funding without unnecessary bureaucracy,” he added.
Addressing Loan Defaults and Recovery Challenges
Oparanya also noted that merging the funds would help tackle the growing issue of loan defaults among Kenyans.
The government believes that a single, well-structured fund will make it easier to track loans, enforce repayment terms, and reduce the number of non-performing loans.
Despite the government’s efforts to support small businesses through the Hustler Fund, reports indicate that a large percentage of borrowers are struggling to repay their loans.
In fact, non-performing loans within the Hustler Fund have risen to 21%, with more than half of borrowers failing to meet repayment obligations.
Recognizing this challenge, the government has been exploring strategies to recover unpaid loans and reduce the rate of default.
One of the latest measures introduced is the Bridge Loan program, which is designed to reward responsible borrowers while also providing a structured pathway for defaulters to improve their credit status and regain access to funding.
Through these reforms, the government aims to create a more sustainable loan system that benefits all Kenyans fairly while ensuring that public funds are used responsibly and efficiently.
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