Saccos and microfinance banks join forces to sensitize members of the public on the importance of savings
In the spirit of celebrating the World Savings week that is observed annually around the world, savings and credit co-operative societies (Saccos) and microfinance banks converged at Kihumbuini grounds in Kangemi to create awareness about savings. The event took place on Friday, 27th October, 2023 ahead of the World Savings day which is commemorated on 31st of the same month. German Sparkassenstiftung Eastern Africa (DSIK), Association of Microfinance Institutions – Kenya (AMFI-K) and African Confederation of Co-operative Savings and Credit association (ACCOSCA) jointly sponsored the event.
Some of the microfinance banks ( MFBs) that participated in this event were : Caritas Microfinance Bank, Rafiki Microfinance Bank, SMEP Microfinance Bank and KWFT. Stima DT Sacco, Kenya Bankers Sacco and Kenya National Police DT Sacco also graced the event. The clarion call of the event was to inculcate a vibrant savings culture for a better future among Kenyans. Members of the public got an opportunity to interact with representatives from various institutions in attendance who were showcasing their innovative products.
“This day we commemorate the World Savings week. We are here at Kangemi to enlighten the public on the importance of savings; why they should save and where they should save. Our theme this year is: Savings for a better future,” Claudia Nabwire, the financial education and capacity development senior advisor to DSIK explained. On her part, the deputy county director of DSIK noted that their main agenda is to promote financial inclusion: “Together with our partners, we promote financial education for MFBs and Saccos. We target small holder farmers, youths as well as micro, small and medium enterprises ( MSMEs).”
The trio that sponsored the event all operate in the financial sector mainly with MFBs and Saccos. DSIK is the development policy arm of the German Sparkassen-Finanzgruppe which provides proactive support to financial institutions that sustainably foster economic and social development. AMFI-K on the other hand is the umbrella organization of microfinance institutions and banks in Kenya. ACCOSCA is a Pan-African confederation of national associations of savings and credit cooperative societies.
Savings products on display
Most MFBs have customized savings products geared towards enhancing a vibrant savings culture. Caritas Microfinance Bank founded in 2015 under the umbrella of the Catholic Church has a savings growth account branded Nawiri that offers very competitive interest rates. Nawiri is a Kiswahili word which means to prosper. Additionally they offer competitive agribusiness loans and asset financing at very attractive rates. “As we celebrate the World Savings week, I would want to urge Kenyans to come forward and save with Caritas,” said Judith Lagat, a branch manager at Caritas.
Rafiki Microfinance Bank has a unique junior savings account that allows parents to save for the future of their children, besides inculcating a savings habit in the young ones. They also have mradi and chama accounts. Mradi means a project – implying a person can save for a project. Chama on the other hand means a group. Faith Barasa, relationship officer at Rafiki Microfinance Bank shared her views about savings: “Savings is the most important things a young person can do for his or her future. If you save, you can obtain an asset. It can also help cushion you against uncertainties like the loss of a job.”
To make savings both fun and challenging, SMEP Microfinance Bank has devised a savings promotion dubbed 52 week savings challenge. It is a three tier programme where individuals save Kshs. 25, 50 or 100. Every week you increase the amount by multiples of the first deposit. For example, if you opt for a Kshs.50 package, in the first week, you save Kshs. 50, the second week you save Kshs. 100, the third Kshs. 150 and so on. By the end of the year, it comes to Kshs. 16,900. What makes this challenge attractive is that it accrues 7 percent interest at the end of the year. “It is not easy to save, so it’s paramount to make a savings plan and have discipline. One of the ways to cultivate discipline is by opening a savings account,” extols Ephantus Kagia, marketing and communications manager at SMEP Microfinance Bank.
Saccos have not been left behind in offering innovative savings products to their members. For instance, Stima DT Sacco has a wide array of savings products. Notably they have biashara accounts to help business people grow. Similarly, they offer asset financing up to 90 percent at a rate of 12.75 percent per annum. “We are celebrating this day by creating awareness on the importance of savings especially among the young people. Savings is very important in the sense that it enhances financial stability,” Joseph Otieno, a staff member of Stima DT Sacco explained. “It helps in inculcating a savings culture so that young people can enjoy financial stability and exercise financial responsibility.”
Kenya Bankers Sacco, started in 1975 by the Central Bank of Kenya employees, serves all Kenyans since its common bond is open. The Sacco accepts deposits or savings and offers credit after six months of membership. In 2022, the Sacco paid 7.5 percent interest rate on main savings and 12 percent on ordinary deposits. Summed up, the rate of return (ROE) on the members’ deposits totaled 19 percent. The Sacco offers Jiinue account, a savings account for personal development. “Saving is essential for wealth creation. When you save, you stand to earn dividends which can be used to expand your business,” noted Nimrod Ngei, a staff member of Kenya Bankers Sacco.
Kenya National Police DT Sacco is one of the leading tier one Saccos in Kenya. It offers a wide array of savings products to its members. Initially started by police officers, the Sacco later opened its common bond to all people in all sectors. The sacco also offers a mortgage product dubbed makao – Kiswahili word for home. “When you save you are able to borrow, invest and grow,” said Annet Ondisa, a staff member of the Sacco.
Call for savings programmes for the youth
Even as awareness continues to be created on the need to save, MFBs and Saccos need to adopt a model that attracts people ; especially the youth aged below 35 years. It is alarming that the highest percentage of members saving actively comprise the older people notably over 45 years. This issue should be handled through a multi-dimensional approach. First, the youth need to be trained on the need to budget and live below their means. With the ‘you only live once’ mentality and social media craze, most youths have never been taught financial literacy. After they save, they should be oriented on ways they can invest to grow their capital. To make it easier, players in the financial sector must not only find ways to make savings easy for youths by deploying easy paperless infrastructure but also provide incentives to save.