Banks Should Incorporate Products Like M-Shwari to Encourage a Savings Culture

By Korir Isaac / May 7, 2019



Jumbo Junior

Financial service providers in Kenya need to give customers an option to set aside a small amount of their income for their digital savings accounts, in efforts to encourage a savings culture.

A savings culture in the national financial inclusion initiatives will facilitate the integration of digital savings to consumers far from propagating for affordable, flexible and accessible offerings on digital savings accounts.

The World Bank, in its late April 2019 report suggested the same and called for equilibrium in innovations and risks claiming it will cater for parts of the population looking to save and gain access to digitally enabled and market-based wealth-building products.

READ ALSO: Digital Lending: A Sound Regulatory Framework Is in Everyone’s Interest

Kenya has made tremendous efforts in pushing for access to digital transactions and payment services and while the result is conspicuous, access to credit, insurance, and investments – the second-generation modes of digital financial inclusion – is still unlimited.

Digital financial inclusion, in a nutshell, involves the disposition of digital methods to reach financially excluded populations with formal financial services custom made to suit their needs.

It is, therefore, highly crucial that consumers have the ability to save part of their earnings, not only to adopt a sound financial culture but to lift them gradually out of poverty.

Few products aimed at financial inclusion have implemented digital savings accounts. They include M-Shwari in Kenya, M-Pawa in Tanzania, and MoKash in Uganda.

However, most of the digital savings accounts in sub-Saharan African countries constitute channels to legacy savings accounts at banking institutions and other lenders.

SEE ALSO: Financial Inclusion on the Rise Globally but Gaps Remain

Saving at financial institutions in sub-Saharan Africa is still low, a fact attributed to limited access to savings products among low-income, and rural populations.

According to the World Bank, low formal saving is also from the perception among low-income individuals that their savings are not large enough to warrant an account at a financial institution.

Maintenance fees, minimum balance requirements, and high indirect access costs such as transportation and time to conduct such business limits a saving culture among people.

Kenya and the African continent, in general, has adopted a mobile-centric digital financial service approach, this is the reason why Mobile Network Operators (MNOs) partnerships account for a greater share of the digital savings account deployments.

RELATED CONTENT: Women Financial Inclusion is Limited, Gallup World Poll shows

As such, services that incorporate digital savings accounts for everyone come highly commended if further financial inclusion and sustainable income for the population is to be fostered.



About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


More Articles From This Author








Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE

ARCHIVES

2019
  • January 2019 (256)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (252)
  • July 2019 (340)
  • August 2019 (227)
  • 2018
  • January 2018 (291)
  • February 2018 (219)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (187)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (246)
  • June 2016 (183)
  • July 2016 (271)
  • August 2016 (249)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (109)
  • May 2015 (117)
  • June 2015 (121)
  • July 2015 (150)
  • August 2015 (157)
  • September 2015 (189)
  • October 2015 (170)
  • November 2015 (174)
  • December 2015 (208)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950