KCB Bank Kenya has kicked off a financial literacy initiative to drive up savings in the country.
Dubbed Weka Weka, the KCB M-PESA campaign will also enable customers grow their mobile banking borrowing limits, giving them access to more money to enhance their livelihoods.
KCB M-PESA has a Target Savings Account that allows customer to target save for an upcoming project. Interest earned on Savings is 6.3% p.a. The interest earned on KCB M-PESA accrues on a daily basis and is loaded to the principal. KCB M-PESA is accessible on the Safaricom M-PESA menu. Transfer of funds from M-PESA to KCB M-PESA to Target Savings account and vice versa is free.
To participate, customers will need to set targets on KCB M-PESA Target savings account and start saving towards the target. The saved amount will accrue an interest as well as increase the loan limit.
We want our customers to save more. A better savings culture increases customer financial health and ultimately, a higher capacity for borrowing when they get ready for a loan. It’s a win-win.
We have a role to play to raise the savings culture because of the potential economic benefits it ultimately holds for our customers. This is perfectly in line with our sustainability agenda of driving social performance in addition to financial performance.KCB Bank Director, Marketing and Communications Angela Mwirigi.
The initiative is expected to help boost the national domestic savings which currently stands at 6.1% since December 2018, compared with 6.5% in the previous year, according to the latest data by CEIC, a global data firm in UK. By contrast, neighboring Uganda and Tanzania have already crossed the 20% mark, even though their per capita income is significantly lower.
According to the World Bank, the culture of savings can only be stimulated by the government, households and companies.
KCB Bank has been at the forefront of innovation. Around 65% of KCB customers are on KCB digital banking which allows them to borrow, pay and save through mobile banking platforms.
Findings of a research by FSD Kenya in 2017 among adult mobile phone owners who had used mobile credit shows that 46% of digital borrowers in Kenya markets currently save digitally. Nearly all digital borrowers in both markets have tried saving digitally at some point, with less than a fifth in each country having never tried it. The research also showed that the main reasons for saving on digital platforms among digital borrowers include Fees, Business purposes and food & household needs taking the biggest percentage of demand for digital savings (at 53%).
Financial inclusion in Kenya has continued to rise, with the percentage of the population living within 3 kilometers of a financial services access point rising to 77.0% in 2018 from 59.0% in 2013. This has been driven by digitization, with Mobile Financial Services (MFS) rising to be the preferred method to access financial services.