WHICH WAY THE HUSTLER FUND?

December 16, 2022 - 5 Minutes Read - By Cathelet Josephat Khanani

The Kenya Kwanza Government rode to office largely on the hope that millions of enterprising Kenyans within the MSME space will get an opportunity to change their fortunes. The now-christened “Hustler Fund” has been touted by its supporters as the foundational niche to spur economic growth for the common Mwananchi.

This promise and commitment to providing seed capital of Kshs. 50 billion has elicited a lot of excitement across the nation as ‘hustlers’ start registering their businesses and drafting acceptable business proposals for appraisal by the relevant bodies. Whether the idea will meet its intended objectives or not is a matter of wait-and-see.  

While the prospects of benefitting from this fund are high, what many of us do not know is that we may be jumping into what we generally consider as entrepreneurship when in fact what we are attempting is “small business ownership”. 

Let me explain.

Various research outcomes have brought the verdict that close to 40% of new businesses close shop within the first year of operation. The result is that the entrepreneurial vision gets blurred, the energy deteriorates and the zest fades away; all that remains is an individual struggling to keep the business to pay bills, wages and sustain social networks that are not economical after all. 

Be careful not to be blinded by free money

Kenyans should be careful to avert a situation where would-be entrepreneurs start business ventures without foresight and when pushed to the wall by circumstances, they forget the main reason why they started that business in the first place. 

A scenario that is likely to play out is fatigued employees who have always been eyeing entrepreneurship opportunities jumping ship and going out to start their own business based on the networks they have created over time while in employment. This false imagination clouds the judgement of such people who think that entrepreneurship will result in overnight success. 

The above is just an example of how small businesses are set up for failure even before they begin operating. 

The first lesson being learnt here is that there is a need for thorough screening measures to be put in place to enable only viable entrepreneurs to get the necessary support. The result will be an uptick in enterprise growth with businesses outgrowing the owners, due to splendid plans and skills in place, with a multiplier impact of employment creation, thereby improving the standard of living. 

Non-adherence to such strict onboarding mechanisms will set up the “Hustler Fund” for failure from the first instance as we shall witness a high default rate by the borrowers caused by a poor appraisal methodology.

While the intentions of the “Hustler Fund” are noble, entrepreneurs must outlive the challenges that attempt to diminish their vision, dreams, and passion by creatively innovating and carefully stepping on the very stumbling blocks to their next level to have a better view of their businesses for scalability. 

The writer is a Business consultant focusing on entrepreneurship and small business management 

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