President Uhuru Kenyatta today officially launch STAWI – a mobile loan product geared towards SMEs and Kenyan economist David Ndii has a lot to say about it.
In an article titled Crony Capitalism and State Capture 2: Documents Reveal the Kenyatta Family’s Plans to Take over Lending to SMEs Ndii had predicted that Uhuru would attempt to take over Lending to SMEs and Stawi is just but the beginning. Ndii claims the product is just but another gimmick that the Kenyatta family is using to grow the Uhuru Dynasty.
Ndii says the product, which was created in February as ‘Wezesha’ was to ride on Huduma namba data to profile borrowers. It was also to use the integrated network of Huduma Centres for marketing and registration purposes.
Interestingly, the only thing that has changed is the scheme name from Wezesha to Stawi.
Everything Ndii had said has since come to pass, Today led by President Uhuru, the Kenya banking sector, under the ambit of the Kenya Bankers Association, has unveiled a credit platform for Small and Medium-sized Enterprises (SMEs). The platform, christened Stawi, is an unsecured digital credit scheme which is meant to improve access to credit for MSMEs, through offering unsecured loans from between KSh30,000 to KSh250,000 with repayment periods of 1 month to 12 months, at an interest rate of nine percent per year.
“The platform will offer micro and small enterprises an overdraft facility of up to KSh 50,000, and a loan of up to 12 months with a limit of KSh 200,000.” Ndii had written.
The new product will be managed by NCBA, Co-operative Bank, Diamond Trust Bank (DTB), and KCB. (Since, CBA, owned by the Kenyatta family, has acquired NIC Bank and rebranded to NCBA bank)
“It will be managed by five banks, namely NIC Bank, Diamond Trust Bank (DTB), the Kenya Commercial Bank and Cooperative Bank under the leadership of the Kenyatta Family-owned Commercial Bank of Africa.” Ndii wrote.
“Why is the government using public funds and resources to subsidise and market a credit product meant to exploit Kenyans? The Stawi product will give undue competition to other products in the market,” Ndii asks.
“When compared with other mobile-based loans, you will recognize that the Stawi product is very competitively priced; in fact, Stawi is the lowest cost mobile loan for SMEs which will make it instrumental in making credit accessible to millions of business owners and youth entrepreneurs across the country,” Kenya Bankers Association (KBA) chairman Joshua Oigara said.
Stawi will charge the cheapest interest rates at an interest rate of 9 pc. David Ndii writes that the 9pc percent interest is bait. Its purpose is to make the case for the proposed government credit insurance scheme by purporting to offer SMEs affordable credit.
Ndii claims Wezesha (Stawi) is a strategy to finance undercutting the competition by pricing below cost at entry, with the intention of charging monopoly prices once the competition is driven out of business. In competition economics, this is called predatory pricing, which is illegal under competition law.
“This Scheme is designed to make the CBA the gatekeeper for the entire banking and financial services to micro-and small enterprises, and I quote: “CBA Digital shall play a lead arranger role to develop and operate the credit risk management model for the full credit lifecycle.”,” He adds.
Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on firstname.lastname@example.org or via Telegram
Edwin Sifuna: ODM To Give Cleophas Malala A Direct Ticket If Musalia Ejects Him
Simba Corp To Lay Off 5 Percent Of Staff
Babu Owino Talks About An Assassination Attempt On Him
Uhuru’s Niece Run KICC Now Risks Auction Over Sh400M Debt
Sarah Wairimu Wants Call Records Of Uhuru’s Relatives And DCI Kinoti Revealed In Cohen’s Case
Treasury Nets Sh33bn From State Agencies
Logistics Company Sues Barclays Bank Over Contravening Agreement
Musalia’s ANC Party Suspends Cleophas Malala For Supporting Raila And ODM
Billionaire Strive Masiyiwa On Using Digital Technologies To Grow Businesses and Nations
Saudi-Owned Almar Water To Build Sh10 Billion Water Desalination Plant In Turkana
Olympian Who Attempted To Run At Eliud Kipchoge’s 42KM Constant Speed, Collapses Before Finishing 1KM
Tanzania’s President Pombe Magufuli Resurface To Dispel Health Rumors
DP Ruto’s Aligned KPA MD Daniel Manduku Is Under Siege
Activist Boniface Mwangi Messages Uhuru On His Birthday
Ex-Othaya MP Mary Wambui Secretely Moves To Retired President Kibaki’s State Home
Incoming Safaricom CEO Peter Ndegwa Has An Impressive CV
Desperation: Cornered Government Now Engages High Propaganda Machinery To Discredit SGR Protests
Sportpesa Could Be Coming Back To Business
Audio Update: Safaricom To Recover All Data Acquired In The Heist
Safaricom Introduces A Data Plan With No Expiry Date After Lawsuit
News1 week ago
Disappointed DP Ruto Locks Out Mariga Team From His Karen Home
Sci & Tech2 weeks ago
If You’re Using An Android Phone, Delete These Dangerous Apps
Sci & Tech2 weeks ago
How To Stop People From Adding You To Annoying WhatsApp Groups
News1 week ago
KEBS Bans Dola, Kifaru, Jembe Ugali And Others Over High Aflatoxin
Investigations1 week ago
Corruption And Ethnic Imbalance At University of Kabianga
Politics2 weeks ago
Ruto’s Cash Crunch And Political Nightmare
News2 weeks ago
KRA Now After Betika Over Sh1.75 Billion
Investigations2 weeks ago
Sonko Goes After EACC Director Of Investigations Abdi Mohamud As Part Of A Bigger Cartel