Kenya's Ruto Launches Flagship Credit Scheme for Poor

Kenya's President William Ruto, gestures as he speaks to his newly sworn-in Cabinet Secretaries at the State House in Nairobi on October 27, 2022

Africa News with AFP

Kenyan President William Ruto officially launched his "resourceful fund" on Wednesday, the flagship measure of his campaign intended to give the poorest access to credit and revive the economy of this African country "from below". 'East.

The Head of State, who presented himself during the presidential campaign on August 9 as the herald of the "resourceful" ("hustlers") of the common people, inaugurated the first part of his program: personal loans to a rate of 8% up to 50,000 shillings (approximately 400 euros), accessible to any adult Kenyan with a money transfer application by mobile phone.

Endowed with a total amount of 50 billion shillings (approximately 400 million euros) over five years, the "resourceful fund" will include three other components: micro-credit (available by the end of January 2023), loans to SMEs (by the end of March 2023) and start-up loans (by the end of May 2023).

"With this program, the government is committed to creating opportunities for millions of people at the bottom of our economic pyramid to advance and realize their aspirations," the Kenyan President said.

“More affordable credit will boost borrower confidence and inject significant amounts into productive activity across the economy,” he continued.

This fund will also oblige borrowers to open a savings account, 5% of the amount of the loan taken out being automatically paid into a personal savings plan that the government will top up for a maximum of 6,000 shillings per year (approximately 45 euros).

Since taking office in September, President Ruto has struggled to deliver on his campaign promises in a country struggling with historic drought, rising living costs and a $70 billion debt burden.

He cut costly food and fuel subsidies introduced by his predecessor Uhuru Kenyatta, and also pledged to make income tax more progressive in an attempt to reduce inequality.

With its 50 million inhabitants, Kenya is the economic locomotive of East Africa, but a third of its population lives below the poverty line.

Inflation officially reached 9.6% in October, its highest for more than five years, while the currency, the Kenyan shilling fell against the dollar (122 shillings for one dollar).