This archive report was first published on 28 September 2019.
On September 28, 2019, five Kenyan commercial banks unveiled a mobile loan facility to support small and medium businesses. The banks behind the app include Commercial Bank of Africa (CBA), Co-operative Bank of Kenya, Diamond Trust Bank Kenya (DTB), KCB Bank Kenya, and NIC Group.
The Stawi Loan App allows micro, small, and medium enterprises to access unsecured loans ranging from Sh. 30,000 to Sh. 250,000. To apply, users must download the app, register with an agent from one of the five banks, and create a mobile wallet.
Once registered, users can borrow money, which will be deposited into their mobile wallet. The loan will be piloted with 3,500 traders. The interest rate is 9% per year, with a repayment period of between one and 12 months.
Other charges include a facility fee of 4%, insurance cost of 0.7%, and excise duty at 20% of the facility fee. The maximum borrowing limit is Sh. 250,000, but small business owners can borrow as low as Sh. 30,000. The limit will be adjusted based on timely repayments.
The Stawi Loan App also offers features such as full or partial repayments stretched over the repayment period, reporting of defaulters to the Credit Reference Bureau (CRB), and the ability to send money to other mobile wallets like M-PESA.
