NAIROBI, Kenya, May 18 – Safaricom and Equity Bank have launched an account that will allow M-PESA users to transfer funds directly into their Equity Bank accounts.
Dubbed M-KESHO, the account seeks to ease access to financial services and create convenience to most Kenyans. It also hopes to tap the huge unbanked population that has access to the revolutionary mobile money transfer service.
The account will be available to M-PESA subscribers and Equity Bank\’s 4.5 million account holders, allowing users to gain access to credit, earn interest on deposits and purchase insurance.
Safaricom Chief Executive Officer Michael Joseph said the new service targets customers looking for the convenience of a bank account that uses M-PESA as the tool to deposit money into their accounts.
“We cannot over emphasise the potential of this product to introduce a savings culture and the amount of money you can move from your phone into a bank account that immediately begins to earn interest,” Mr Joseph said while explaining that with the M-KESHO account, one will be able to get access to short-term loan facilities ranging from Sh100 to Sh5,000 accessed on the M-PESA menu cutting down on costs associated with banking for low income earners.
Equity Bank Chief Executive Officer James Mwangi said the innovative account marked the convergence between banking and telecommunications that will make financial services more accessible and affordable.
“We want to ensure that no Kenyan is locked out of accessing basic banking services. If you look at other solutions in the market, nobody has put together all these services to provide this kind of convenience to the customer. This is in line with our mission to offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders,” Mr Mwangi said.
Central Bank Governor Prof Njuguna Ndung’u said the use of technology in the banking sector could help rope in more people to the formal banking system.
He highlighted that since 2007 the country had witnessed a rise in bank accounts held from 2.3 million accounts in 2007 to 8.4 million accounts currently.
Since its launch three years ago, M-PESA has become a household name boasting of 10 million subscribers having moved Sh405 billion over the period.
“We have touched the lives of many Kenyans. They no longer send money, they M-PESA it,” Mr Joseph said.
Customers will also be able to request for insurance policies and get covered without having to walk into an insurance company or see an insurance agent, covered by the terms and conditions of operating the account once they request for the policy.
The premiums payment will be tiered so as not to lock out those who truly need them.
The application is built with the ability to score a customer’s credit rating using six months history of their M-PESA-centric balances.
Also speaking during the launch, Finance Minister Uhuru Kenyatta said microfinance is the way to go if the country targets liberating the many Kenyans suffering from abject poverty.
Mr Kenyatta added that access to formal banking would raise Kenya\’s savings rate as a proportion of GDP to between 25 and 30 percent to enable investments needed to reach the goal of a sustained 10 percent economic growth rate in the medium term.
“Indeed there is ample evidence globally that when poor people have access to financial servces, they can change their lives and build stronger, more prosperous and cohesive communities,” he said.
The account underwent a design and testing period of three years before Tuesday’s launch that was attended by President Mwai Kibaki