Commercial Bank of Africa (CBA) and Safaricom’s paperless banking service M-shwari has today launched a fixed deposit savings account dubbed “Lock Savings Account”, the first of its kind in the mobile money space aimed at helping Kenyans an opportunity to save for a specific purpose.
The move is aimed at entrenching a savings culture in a country where savings fall below 20% of the GDP, the lowest in the region.
To access the Lock Savings Account feature, customers will need to dial *234*6 and follow the prompt. The revolutionary service will allow customers to save a minimum of KES 500 for a maximum of six months at interest rates of up to 6% p.a.
Speaking on the launch, Jeremy Ngunze, CBA Kenya’s Chief Executive Officer said, “We introduced this new feature on the strength of recurrent customer feedback which suggested the need for a facility which would inherently instill in them the discipline required to make medium term savings towards a specific goal.”
M-Shwari service was launched at end of 2012 as a micro savings and lending facility whose primary aim was to bring more Kenyans into the formal financial services fold and has seen CBA’s loan accounts grow by more than 800% from 89,000 in 2012 to 897,000 in December last year making the bank the country’s top retail lender. M-Shwari has over 7M customers who have in the last 2 years transacted more than KES 156 Bn and taken out loans worth KES 13 Bn.
“Reports by the Central Bank have lauded M-Shwari as the most impactful contributor to the formal financial services sector in the history of the nation. Indeed, M-Shwari has been credited with growing to 67%, the segment of the country’s bankable population that has access to a bank account,” said Ms. Betty Mwangi-Thuo, Safaricom’s of GM Financial Services.
CBA and Vodacom launched a similar service in Tanzania dubbed M-Pawa, which has registered 250,000 customers in the three weeks it has been in the market; underlying the disruptive power of the M-PESA proposition in the region.
Launched in November 2012 as a bank account whose inspiration was drawn from M-PESA’s success in promoting the financial inclusion agenda. The service was in 2013 honoured by the Computerworld Honors Program in Washington DC with the 21st Century Achievement Award in emerging technology.
Customers open and operate an M-Shwari bank account through their mobile phones, via M-PESA, without having to visit banks or fill out any forms. M-Shwari further provides them with the ability to move money in and out of their M-Shwari savings account to their M-PESA account at no charge.
The revolutionary service is the only bank account found anywhere in the world that allows customers to save as little as KES 1 (USD 1 cent) and earn interest on the saving balance. M-Shwari also enables customers to access instant micro credit products (loan) valued between KES100 and KES 50,000 through their mobile phones.
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