What you need to know:
- New service links M-Pesa clients to their Equity Bank accounts
Equity Bank and Safaricom have launched a unique banking service that enables individuals to withdraw money from their bank accounts via their mobile phone handsets.
The service also allows Equity customers to deposit money into their accounts through Safaricom’s M-Pesa agents.
The new account dubbed M-Kesho has been designed to mainly tap into the huge number of Kenyans — especially from poor areas — who own mobile phones but lack access to bank accounts.
With a deposit of as little as Sh100, individuals will be able to credit and withdraw money from the account using the M-Pesa money transfer service.
The account holders will neither be required to pay monthly fees nor have a minimum balance. The cash deposited will raise an annual interest depending on the amount an individual has, among other considerations.
The new service was unveiled in Nairobi on Tuesday at a ceremony attended by President Kibaki, Prime Minister Raila Odinga and Cabinet ministers.
The President and the PM welcomed the product, saying it was a good example of lowering barriers for the poor to access financial markets and encouraging them to save and access credit at the same time.
Such access would help the poor build their assets through savings and affordable credit, the President said, adding: “Unfortunately, a significant proportion of Kenyans still remain outside the realm of formal financial services.”
Safaricom chief executive Michael Joseph said the new venture would drive customers to save money in their bank accounts and enjoy the benefits of having the added value services of both M-Pesa and an Equity Bank account.
The National Financial Access Survey done last year found 32 per cent of Kenya’s bankable population is excluded from formal and informal financial services.
About 27 per cent access only informal financial services, while the formal banking sector serves 23 per cent of the bankable population.
The M-Kesho account launch will initially benefit the more than 4.5 million Equity Bank account holders and 10 million M-Pesa customers.
Equity Bank boss James Mwangi said the partnership would propel financial services to the “last mile”.
“When all the 10 million M-Pesa accounts are changed into bank accounts, Kenya will top the list of the most banked developing country in the world,” he said.
Finance minister Uhuru Kenyatta and his Information and Communications counterpart Samuel Poghisio said the initiative was a revolutionary step in demystifying banking and making it easy for every Kenyan to keep their money in a secure place.