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.
On the other hand, Stawi, which has since been supplemented with a smartphone application for ease of access has been criticized extensively because it is reportedly taking advantage of Kenyans’ addiction to mobile loans, and does not appear to operate any different from existing products that charge an arm and a leg as interest.
Some expected that it would genuinely serve its target customer base, but its ‘low’ interest rate has reportedly been seen as a scheme to net as many customers onto the platform as possible, which, in the end, is lucrative because controlling credit is arguably one of the most critical money-making ventures that are part of any financial institution’s backbone.
While the product is new, we decided to take a look at its offerings, including what a Stawi agent is required to have. The agent, by the way, is a ‘is a person or entity aimed at supporting the Stawi product to reach the customers. As part of enhancing the product’s accessibility to customers, Stawi Agency is aimed at assisting customers to complete sign up on Stawi and act as brand ambassadors.’
Besides the ordinary requirement such as IDSs, KRA pin, a passport photo, signed contracts, and a KCSE certificate, agents are supposed to have a CBA Loop account. This is the first time we have seen this ask. CBA Loop is a youth-oriented product that has been around for a while now. It has many appealing features and operates as a different entity from NCBA. One of Loop’s limitations is that you cannot deposit cheques, which, to me, is a big deal.
Going back to that particular requirement, it is bizarre because Stawi is supposedly a partnership among KCB, DTB, NCBA, and Cooperative Bank. The need to have a Loop account (which happens to be NCBA’s product) is strange and has not been explained in Stawi’s website. The other partners have robust mobile-based banking products, and there is a high chance that agents are customers to those financial organizations. This would compel them to open another account, which can be messy especially for people that want to keep their banking activities as simple as possible.