Commercial Bank of Africa (CBA) and Safaricom Limited have introduced a fixed deposit feature on the globally acclaimed M-Shwari platform dubbed “Lock Savings Account”. The Lock Savings Account, the first of its kind in the mobile money space, will afford Kenyans at the bottom of the social pyramid 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 upto 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 that we introduce a facility which would inherently instill in them the discipline required to make medium term savings towards a specific goal.”
The award winning M-Shwari service was launched at the tail end of 2012 as a micro savings and lending facility whose primary aim was to bring more Kenyans into the formal financial services fold.
As a testament to its revolutionary nature, M-Shwari 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 saved more than KES 40 Bn and taken out loans worth KES 1.2 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.
A replica service launched in Tanzania by CBA and Vodacom dubbed M-Pawa, 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.