Shared by Francis Mwathi.
A few years ago saw the launch of M-PESA in Kenya, a mobile-phone based money transfer service aimed at creating a popular and affordable service designed to enable mobile phone users to undertake monetary transactions and send remittances home the with only limited involvement of a bank was launched. It was a big hit and has now over 10 million users in Kenya; making it the country’s largest bank. The mobile payments service has continued to demonstrate how m-payments can successfully expand the range of financial options available to poor households.
In a credit access report released known as Fin Access 2009 survey, only a total of 40.5 per cent are formally served representing approximately 7.6 million of an estimated bankable population of nearly 19 million in Kenya. This new service will push the banking frontier to reach out to the unbanked population by enabling Kenyans with mobile phones to easily open bank accounts. M-PESA has transformed the speed of business in Kenya especially for small and medium enterprises allowing for money to be sent to all areas of the country most importantly those areas that lacked the adequate financial institutions. It also capitalized and helped out the millions of Kenyans who could access the traditional financial services provided by other banks due to red tape and fee’s. In a country with very few credit and debit card holders coupled with the fact that less than 30 per cent of establishments accept card.
But the real revolution is the new partnership with Safaricom mobile network and Equity Bank who recently announced a new bank account called M-Kesho. This account allows customers to merge their Mobile bank account (M-PESA) with an Equity account allowing them for a range of services that will help Kenyan entrepreneurs tremendously. M-Kesho is fully integrated into the M-PESA user interface on customers’ mobile phone, and only accessible through Equity Bank’s own mobile banking service.
LOANS ON YOUR PHONE
First off, with the new account one will be able to take loans out on phone instantly thus no paperwork, queues or long bus ride into the busy city. Entrepreneurs such as farmers can now get a cash advance to pay the harvester and send his crops to market faster. This will prove instrumental to supporting small businesses and start ups with cash flow problems.
EARN INTEREST ON YOUR PHONE BANK
The M-Kesho account will also allow its users to earn interest on a monthly basis direct from your mobile phone. This is said to improve savings and cultivate a culture of saving as there is no minimum balance. The M-Kesho account will look to bring the 30 per cent of Kenyans who have not had access to such financial services. With the service small savers will keep their money safely as it is insured by the Deposit Protection Fund and earn interest from as little as KSh. 2000.
INSURANCE ON YOUR PHONE
The M-Kesho account will allow individuals to purchase insurance direct from their phones and pay in small installments of weekly, monthly and even daily. This will extend coverage to 35 per cent of Kenyans who are not able to get generic insurance.
Various financial experts have taunted M-KESHO as big news on several counts; it creates an opportunity to offer a broader range of financial services seamlessly on the biggest mobile money platform in existence in the world. Secondly, two of the very powerful Kenyan brands that have relevance for the poor have come together and they can easily drive awareness and mass marketing on an unprecedented scale.