The Kenyan banking sector, under the ambit of the Kenya Bankers Association, has unveiled a credit platform for Small and Medium-sized Enterprises (SMEs) at the sector’s inaugural ‘Inua Biashara Day’.
The platform, christened ‘Stawi’ on Wednesday, 6 November 2019, is an unsecured digital credit scheme which is meant to improve access to credit for MSMEs, through offering unsecured loans from between 30 000 (300 dollars) to Ksh.250 000(2 500 dollars) with repayment periods of one month to 12 months, at an interest rate of nine percent per year.
Speaking in Nairobi while launching the product, President Uhuru Kenyatta lauded KBA’s efforts in coming up with the Stawi product, adding that it is a culmination of a joint effort by both the government and the banking sector to provide affordable access to credit for MSMEs.
“Today, our efforts have borne fruit and I am confident we are going to restart this powerful engine of our economy. I take this opportunity to thank and welcome our development partners to join us in finding solutions to grow our MSMEs,” the President said.
The President encouraged Small and Medium Enterprises (SMEs) to take advantage of Stawi in order to grow their businesses to the next level.
Kenya Bankers Association (KBA) chairman Joshua Oigara said that KBA member banks designed Stawi in response to calls for the industry to facilitate MSMEs access to finance. He added that the association was proud to launch the product during the Inaugural Inua Biashara Day, a platform geared towards Promoting Innovative Finance for SMEs and increasing industry engagement and accountability to the MMSE sector.
“When compared with other mobile-based loans, you will recognize that the Stawi product is very competitively priced; in fact, Stawi is the lowest cost mobile loan for SMEs which will make it instrumental in making credit accessible to millions of business owners and youth entrepreneurs across the country,” he said.
Stawi is a solution designed for all entrepreneurs to improve access to credit aimed at growing or improving their business. The service provides entrepreneurs with a digital account for their business operations as they can manage all payments and money made from their business.
So far, 80 000 SMEs customers have been signed on Stawi which has been operating on a pilot basis until today’s launch.
“SMEs play a very crucial role in Kenya’s economy with over 90 percent of all established businesses being in this category. This accounts for over three quarters of all jobs in the economy. However, the overall contribution to the economy is below potential at 28.5 percent compared to developed countries where SMEs contribute between 50 percent and 75 percent to the GDP,” Oigara said.
The biggest impediment to growth in the sector has been cited to poor access to finance, limited credit history as well as the lack of proper skills and knowledge of product financial statements impeding SMEs ability to repay, this additionally affects SMEs ability to access markets as most information is made available mostly for the large and well-established businesses only.