This content has been archived. It may no longer be relevant
Stawi is a mobile loan product that will allow MSME’s to access unsecured credit of between Shs 30,000 and Shs 250,000 at an interest rate of 9 percent per annum.
Financial institutions in Kenya have been told extend lending to Micro, Small and Medium enterprises(MSME’s) to help them thrive.
President Uhuru Kenyatta on Wednesday said that lack of access to affordable credit is partly to blame for the estimated 90 percent of start-ups that collapse within three years of their set up.
“It is better to find mechanisms and ways to lend to those young men and women who are interested in making something positive out of their lives, interested in employing their fellow young men and women, because if they are positively engaged, if they are part of our economic prosperity even your businesses are secure,” Uhuru said when he launched stawi, a new credit facility for Micro, Small and Medium (MSME’s) enterprises.
Stawi will offer unsecured loans ranging from KSh30,000 to KSh250,000 at an interest rate of nine percent.
“Stawi will offer a longer repayment period to small business borrowers, thus making it easier for them to better manage their cash flows and grow their businesses to the next level,” Uhuru said.
Uhuru said that more than seven million SMEs are unlicensed which hinders them from access capital from the credit infrastructure as currently set up.
“We have over 7 million SMEs. Let us engage them and provide cheap loans for them to grow. If you say you can’t offer them service because they are high-risk, what happens when their businesses collapse? Uhuru said.
READ:
On the other hand, Dr. Patrick Njoroge, Governor Central Bank of Kenya disclosed that MSMEs contribute about 28.4 percent of the Gross Domestic Product.
“The approximately 7 million MSMEs are concentrated in the manufacturing, wholesale and retail trade, and transport and storage sectors. The resilience of MSMEs has indeed been a key strength of Kenya’s economic growth in recent years,” said Dr. Njoroge in his remarks.
Commercial Bank of Africa Limited (CBA), the Cooperative Bank of Kenya Limited, Diamond Trust Bank Kenya Limited (DTB), KCB Bank (Kenya) Limited, and NIC Group PLC partnered with the Central Bank of Kenya to offer the scheme which is aimed at improving access to credit for MSMEs.
“Stawi rides on technology and innovation to provide a cost-effective ‘anytime anywhere’ credit product that is tailored to the needs of MSMEs. Most importantly, it aims at not just providing finance but also supporting them to enhance their creditworthiness, business skills and ultimately grow their businesses,” said the CBK Governor.
