When the government finally learnt the potential muscle that Small to Medium Entreprises (SMEs) it sought to solve their limited credit situation that was stalling their performance, through a digital credit product.
Branded Stawi, the loan product is a conglomerate of Commercial Bank of Africa Limited (CBA) which is the primary bank, the Cooperative Bank of Kenya Limited, Diamond Trust Bank Kenya Limited (DTB), KCB Bank (Kenya) Limited, and NIC Group PLC providing a digital credit product for small and micro-entrepreneurs backed by the Central Bank. This cooperation allows the government to reach out to a growing number of small enterprises, promoting job creation and income generation, with a multiplier effect on the economy.
“Until now, lending to MSMEs has been constrained by the lack of reliable information to assess their creditworthiness. The innovation in this product is the use of all data on customers’ transactions to fill this gap. In that sense it is revolutionary,” said CBK Governor Dr Patrick Njoroge during the launch of Stawi at Gikomba Market.
Stawi App is now available on google play store with over 5000 downloads barely a day after it was availed to the public. You’re required to have a business licence number and you need to be activated by CBA Bank agents for you to take up the loan. Eligible candidates can then access the loan by download the application and filling in their details, after which the money is credited to the customer wallet. Stawi offers unsecured loan products ranging from Sh30,000 up to Sh250,000 with repayment profiles of between one to twelve months.
The interest rate is charged at 9 per cent per annum with other costs pushing it higher which include, late payment fee 10 per cent of the past due amount, facility fee at 4 per cent on loan disbursed and a loan insurance 0.4 per cent of the amount disbursed and an excise duty which at 20 per cent of the facility fee.
While the app is up unlike other financial services, the website does not have a legal entity, terms and conditions or privacy policy. It is hard to tell what SMEs are signing up for in this digital credit product.
