Players in the Small and Medium Scale Enterprise (MSMEs) sector have received a major boost after the CBK in partnership with five banks launched a mobile lending scheme set to see them receive loans of up to KSh 250,000.
The loan product, branded as Stawi, will be made accessible to MSMEs through a simple application process using a mobile phone.
The CBK governor Patrick Njoroge said the funding will broaden growth in the MSME sector which has for long been unable to access funding from financial institutions.
“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 Njoroge.
Njoroge added that the cooperation between the five banks will allow them to reach out to a growing number of small enterprises, promoting job creation and income generation, with a multiplier effect on the economy.
“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.
We 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 undeserved yet vital segment of the market,” the CBK boss continued.
Borrowers will access the loan through a mobile phone application and the money will be credited to the customer wallets.
Stawi will offer unsecured loan products ranging from KSh 30,000 up to KSh 250,000 with repayment profiles of 1-12 months, at an interest of 9% per year.
The money will initially be managed by Commercial Bank of Africa (CBA), the Cooperative Bank of Kenya, Diamond Trust Bank (DTB), KCB Bank, and NIC Group PLC.
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