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Tuesday, May 26, 2020

The day President Uhuru publicly blasted top bank CEO

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Stawi Loans: In November last year, President Uhuru Kenyatta unleashed a sharp criticism for a certain local bank that had reportedly refused to join the Stawi Loan program that was being spearheaded by the government.

The program is a mobile lending based platform that was formulated by the Central Bank of Kenya. KCB Group, Diamond Trust Bank, Cooperative Bank and NCBA Group are some of the banks who pledged funding for the digital credit facility.

But it seemed that President Uhuru was irked that a bank he may have wanted on board was not playing ball. “You cannot just sit there in your ivory tower and think of minting money from investing in Treasury bonds. It is common sense,” he said.

Stawi Loans

The criticism left questions on which of the local top banks the Head of State was referring to. Some of the banks that had not indicated whether they’d be joining the program included Equity Bank which already has its own mobile loans platform dubbed Equitel, Barclays Bank which runs the Timiza lending app, and the Standard Chartered Bank. This was the first time that the President Uhuru had blasted a top corporate in public for failing to board a government steered program.

“His remarks were in reference to hesitance by some of the biggest commercial banks to provide cash for onward lending through Stawi,” said a report that appeared in a local daily. “While calling for bankers to buy into the project, President Kenyatta said the country’s estimated seven million small businesses were the engines of the economy. Borrowers can access loans of between Sh. 30,000 and Sh. 250,000, repayable at a subsidized rate of nine per cent.”

The report added that the Stawi loans were designed to accommodate MSMEs, which have for a long time been unable to access affordable credit because of their high risk nature due to lack of collateral or business plans needed to convince lenders of their creditworthiness.

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