Gachora: Why mobile-based loan platform Stawi died a natural death

While admitting the demise of the platform, NCBA Managing Director John Gachora who also doubles up as the Chairman of the Kenya Bankers Association (KBA) says Stawi has caved into peculiar problems.

“One is the timing. We launched Stawi in late 2019. We had undertaken a full proof of concept for the platform at Gikomba, but when COVID-19 struck soon after, it was businesses in places such as Gikomba which were the first to fold,” he said on Thursday.

“Unfortunately because of that, Stawi did not get good uptake. It started off quite well and just stopped and then went down very quickly.”

Priced at the same rate as the Central Bank of Kenya (CBK) benchmark lending rate (nine per cent at the time) Stawi had been tipped to offer unsecured loans of between 30,000 and 250,000 to SMEs.

Save for NCBA, three other participating banks including KCB, Co-op and DTB have since ditched the platform.

While Gachora did not disclose whether lenders were still eager to pull Stawi out of the rubble, the banking executive appears keen to advance credit to SMEs through the newly minted SME Credit Guarantee Scheme.

Despite generating a mere Ksh.2.1 billion in loans in its first year, Gachora is confident the scheme can deliver despite the initiative slack at the starter blocks.

“Uptake started slowly as each bank had to come up with new policies before the start to lending. There are a lot of requirements from the government that one has to meet before one qualifies for the guarantee,” he added.

The low traction of government-led interventions such as Stawi and the credit guarantee scheme has however raised sharp criticism from other stakeholders.

This as the government appears to fall short of its own goal of supporting small businesses in the country.

According to the Managing Director of Viffa Consult, an SME Consultancy, Victor Agolla, key data on small business is required to fit government-led interventions to purpose.

“There exists a need for new data collection on SMEs for the interventions to pay off. We have had no new data on the sector since 2016 without which government interventions are due to fall short of the mark,” he said.

Agolla has further lobbied for the incorporation of fintechs to schemes such as the credit guarantee for greater market traction.