Five Banks and CBK Launch “Stawi” SME Loan Facility

Micro, small and medium enterprises (MSMEs) will now be able to access unsecured loans valued between Sh30,000 and Sh250,000 from a new loan facility called “Stawi”.

This is after five commercial banks introduced a Central Bank of Kenya-backed loan product aimed at small businesses.

The loans, which will be processed through applicants’ phones, have a repayment period of 1 to 12 months. They also attract an interest of nine percent per annum.

Upon disbursement, other charges shall be collected which include 0.7 percent insurance cost, 4 percent facilities fee and excise duty at 20 percent of the facility fee.

The five banks that will initially manage the loan are KCB Bank Kenya, Commercial Bank of Africa (CBA), NIC Group, Diamond Trust Bank Kenya (DTB) and Cooperative Bank of Kenya (Co-op Bank).

Good borrowers will receive cash on the basis of their borrowing profiles under the scheme.

“Small and mid-size enterprises are the lifeblood of any economy, but many have struggled to secure the necessary financing to continue operations in the current economic climate,” said CBK governor Patrick Njoroge. This was during the launch of the loan facility held at Gikomba Market, Nairobi on Monday.

He added that they are excited to work with the five banks to minimize the complexity of developing new and more accessible loan offerings as they bring much-needed capital to this underserved yet vital segment of the market.

The loan is part of the CBK’s effort to ease the credit squeeze on SMEs.