Kenya Government and CBK Launch SME Loan Product with Five Banks


StawiAccess to credit services, especially from established and traditional financial organizations has been a challenge for a lot of informal or growing businesses. It is an issue that has been around for some time, but has since been managed, albeit using third-party options that are not backed by any state authority, including the likes of fintech apps that have since flooded the online credit space that primarily do not require collateral to offer loans to people and businesses that need them.

To this end, the Central Bank of Kenya (CBK) and its key leaders embarked on a program to address the issue. The process sought the support of five local banks to develop a mobile-based credit product for medium scale enterprises (MSMES). Christened Stawi, the new product will be managed by 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.

It is worth noting that Stawi is the same product that was announced by the President in lengthy Parliament session a couple of weeks ago.

CBK says that the rollout of Stawi will be pilot-based, meaning not all businesses will have access to the facility. Interested parties can only apply via a dedicated app, and can access funds ranging from KES 30,000 to KES 250,000. Repayment periods can be as short as 1 month or long 12 months at an interest rate of 9 percent yearly.

Additional charges

Besides the 9% interest rate pa, the loan will be accompanied with a 4 percent facility fee, a 0.7 percent insurance fee based on the disbursed amount and an excise duty that is 20 percent of the facility fee.


  • The facility allows full or partial repayments stretched over the repayment period (maxes out at 12 months)
  • Those who default repayment will be reported to the CRB.
  • Stawi will have a mobile wallet. We are not sure if it will be equipped with additional services such as payments as so forth.
  • Money in the wallet can be sent to other wallets such as M-PESA.
  • The app has all the bells and whistles of a loan app such as checking the amount that can be borrowed, charges, repayment plans and so forth.

There are a lot of things that have not been clarified: the CBK appears to have made an exception in the Stawi’s interest rate, which is lower than what traditional banks and fintech apps charge. Is it a move to undercut the competition by appealing to people and businesses that want cheap loans? Are the rates low for mass onboarding – and depending on market forces, will it change in the long run?

Similar to any loan product, interested businesses should be wary of the fine print usually found in terms and conditions. The additional charges mentioned above should highlight the need to examine the offerings of the product before making any commitment with Stawi. In the meantime, the pilot phase will target 3500 traders in the MSME sector in the first two weeks. The second launch will target 10,000 traders, who will also be registered by Stawi agents.


  1. […] Stawi, a credit facility that allows SMEs, among other smaller businesses to get access to unsecured loans that range from KES 30000 to KES 250000, was officially launched by President Uhuru Kenyatta towards the end of 2019. The product received a fair share of publicity in the year, both good and bad. It was lauded for offering credit to groups that are traditionally pushed away by banks, as well as its relatively affordable interest rates – although we realized that the numbers were actually higher than what was advertised. […]

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