Govt Addresses Calls to Scrap Hustler Fund After Report Exposes Flaws

Hello and welcome to the Money News Roundup Newsletter. Today, we’re covering the government's response to calls on scrapping the Hustler Fund and the court ruling on the firing of 'weak' employees.

‍Govt Responds to Calls on Scrapping Hustler Fund

Cooperatives CS Wycliffe Oparanya has downplayed calls to scrap the Hustler Fund, which the Kenya Kwanza administration introduced.

As reported by Citizen Digital, the CS made the remarks following a report released by the Kenya Human Rights Commission (KHRC). The report concluded that the report was flawed, hence the need to scrap it.

KHRC had stated that the fund was still inaccessible to many Kenyans, with the loan limits also highlighted as part of the reasons why many Kenyans are locked out of the fund.

In response, the CS expressed that the fund has helped millions of Kenyans, adding that data by the Central Bank of Kenya (CBK) shows that the Hustler Fund had overtaken institutions like the Agricultural Finance Corporation in financing farmers.

"The report lazily claims that we lend between Ksh500 to Ksh1000 when in actual sense, the personal loan product cited provides limits up to Ksh50,000. This was the case from the onset. A properly conducted study should have brought up the true status," read the response in part.

"To date, Hustler Fund beneficiaries have continued growing their limits, and we have those who are borrowing up to Ksh150,000 on the Bridge loan product."

‍Employers Can't Fire ‘Weak’ Workers Without Making Effort to Improve Them - Court 

The Employment and Labour Relations Court has ruled that employers cannot fire ‘weak’ employees without making an effort to help them improve.

Justice Linnet Ndolo faulted Cleanshelf Supermarket for firing Stephen Muraya (who headed the bakery division) over his performance.

According to the court documents, the employee was sent on compulsory leave due to unsatisfactory performance, as the supermarket viewed it, before being fired. According to the court, sending an employee on compulsory leave does not show that the employer wants to help the employee improve their performance.

Further, the court noted that employees need to be given enough time to improve their performance before being fired (2 or 3 months). Read about the ruling as covered by the Business Daily.

‍Firm Left in Ksh7 Billion Debt After Botched Nairobi Expressway Tax Deal 

Cale Infrastructure Construction Company has been left in a Ksh7 billion debt after the High Court ruled in favor of the Kenya Revenue Authority in a tax dispute filed by the company.

As reported in the Business Daily, the company has been subcontracted by Moja Expressway during the construction of the 27-kilometer road. The company was promised tax exemptions and tasked with procuring construction materials and machinery.

However, an audit by the taxman established that the company owed Ksh6.9 billion in taxes between 2020 and 2022.

In its ruling, the court also maintained that the KRA was in order in demanding the payment of the taxes. Read more here.

‍Why Maize Flour Prices Are Set to Increase 

Kenyans could soon face a further increase in maize flour prices amid an increase in maize prices.

As reported in the Business Daily, maize flour prices have hit a 20-month high despite the importation of duty-free yellow maize. 

According to data from the Kenya National Bureau of Statistics (KNBS), the average price of a kilogram of loose maize rose to Ksh71.24 in July — the highest level recorded since November 2023, when it averaged Ksh71.98.

The recent rise has been attributed to the competing demand for maize used for animal feeds and recent weather conditions, such as the floods in 2024. Additionally, harvest in places where large-scale farming is done is expected to be done in October and November.

‍CBK to Retain Lending Rate for August

As reported in the People Daily, the Central Bank of Kenya is expected to maintain the Central Bank Rate (CBR) at 9.75% after months of reduction.

It was explained that the CBK would maintain the rate as it monitors the market, as it awaits to monitor the impact of the recent reductions on the economy. Banks use the rate set by the CBK to set their lending rates for loans given to Kenyans.

Among the key developments to be monitored is lending to the private sector.

Despite recent reductions in the CBR, banks are yet to accelerate their lending to the private sector, even as the financial institutions prefer lending to the government.

MPs to Probe Appointment of Company to Validate Vehicle Importation Papers 

The National Assembly Trade Committee is set to probe the Kenya Bureau of Standards (KEBS) over its selection to validate papers of second-hand vehicles imported to the country.

As detailed in the Standard, the committee will seek to know whether the engagement was done through a competitive procurement process in accordance with the Public Procurement and Asset Disposal Act and whether there were other local or international firms considered.