The Kenya banking sector, under the ambit of the Kenya Bankers Association, has unveiled a credit platform for Micro- Small and Medium-sized Enterprises (MSMEs) at the sector’s inaugural Inua Biashara Day.
The platform, christened Stawi, is an unsecured digital credit scheme which is meant to improve access to credit for MSMEs, through offering unsecured loans from between KSh 30,000 to KSh 250,000 with repayment periods of 1 month to 12 months, at an interest rate of nine percent per year. This comes as parliament fails to overturn President Uhuru Kenyatta’s memo on Finance Bill seeking to scrap rate cap introduced in 2016.
The President, who was the Chief Guest during the event, 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 also welcome our development partners to join us in finding solutions to grow our MSMEs,” the President said.
The President encouraged Micro-Small and Medium Enterprises (MSMEs) 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 MSME 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.
The founding member Stawi banks are Kenya Commercial Bank (KCB), Co-operative, NCBA, DTB. So far, 100,000 SMEs customers have been signed on Stawi which has been operating on a pilot basis until the official launch.
Commenting on the Inua Biashara Day concept, Oigara said:
“Inua Biashara Day is a continuation of a concerted effort by the banking industry to provide solutions that support the growth and development of MSMEs with the view to ensure that Kenya’s home-grown companies remain strong and thriving entities. It is for this reason that our theme this year is “promoting innovative finance for MSMEs.”
MSMEs play a very crucial role in Kenya’s economy with over 90% of all established businesses being in this category. This accounts for over three quarters of all jobs in the economy.
The biggest impediment to growth in this sector is poor access to finance, limited credit history as well as the lack of proper skills and knowledge of product financial statements impeding MSMEs ability to repay, this additionally affects MSMEs ability to access markets as most information is made available mostly for the large and well-established businesses only.
KBA CEO Dr. Habil Olaka said that the industry had invested in supporting capacity building through programmes like Inuka SME which presents a unique opportunity to equip small business owners with the skills, knowledge and information to prepare them to grow and the Ybizna program.
“As an industry, we commit to continue supporting you and your businesses to thrive. We also commit to helping you go further, across counties, across borders and even globally. We do this because we recognize that Kenya’s future is tied to the MSME sector growth” said Dr Olaka.