Kenya’s foremost savings bank continues the tradition of celebrating World’s Savings Day
Savings is an integral part of personal development and human civilization. Against this background, the World Savings Day or World Thrift Day is celebrated annually on 31st October world over except in India where it is observed on 30th October. This important day mainly focuses on the importance of saving as a means of securing one’s future. True to its tradition, Kenya’s premier savings bank (Postbank) will mark the day by lining up an array of activities to educate the public about financial literacy. Having been in the market for over one century, Postbank has a rich heritage of inculcating a savings culture among Kenyans.
The World Savings Day was first celebrated in Milan, Italy in 1924 at the tail end of the very first international savings banks congress. It was launched by Filippo Ravizza who initially called it the International Savings Day. Soon after the Second World War, the day gained popularity as more people started embracing a savings culture .
The theme of the 2023 World Savings Day is: Conquer your tomorrow through savings.
Merits of savings
By and large, the savings consolidated from individuals is borrowed by the government (through treasury bills and bonds). This is in turn used to fund both recurrent and development expenditure. For instance, the government is able to finance infrastructural projects and this plays a pivotal role in stimulating the economy. A shortage of sufficient funds in the country makes the government to go for international lenders. Servicing these debts in foreign currencies is expensive and the burden is passed to the taxpayers. “ It is therefore important to mobilise a lot of savings locally, in order to stop over depending on foreign debts,” Postbank’s Managing Director, Mr. Raphael Lekolool says.
Mr. Lekolool further notes with concern that there is need to create more awareness among Kenyans on the need to save. “Mobilising savings is critical for economic development,” he explains. “Unfortunately, going by a number of studies, our level of savings as a country is very low,” he adds.
At an individual level, savings acts as a cushion against unexpected events – the precautionary motive of savings. Conquer your tomorrow through savings is therefore an apt theme for this World Savings Day considering that many countries across the globe are experiencing economic challenges. “As a bank, we encourage our customers to conquer their future through savings so that they can be financially independent,” explains Mr. Lekolool.
He further says that the individuals who are financially disciplined and are able to save on a regular basis, do not have to depend on credit to finance their expenses. To that end, they can set up small enterprises by accumulating savings, hence generating income for their households.
According to Mr. Lekolool, Postbank was set up as a savings bank by the Kenyan government through an Act of parliament. Its mandate is to mobilize savings among Kenyans for socio-economic development.
True to its mandate, Postbank has routinely over the years facilitated financial literacy sessions with various stakeholders. These sessions target the youth in learning institutions, employees in both the private and public sectors as well as the senior citizens who are in retirement. “We have an arrangement with the universities and other learning institutions to conduct financial literacy sessions,” says Mr. Lekolool. “ This equips students with financial literacy skills and knowledge which come in handy once they join the labour market,” he adds. During these sessions, the topics covered include: budgeting, building a savings plan and setting financial goals.
The savings mobilized
Conquering your tomorrow through savings basically falls and rhymes with Postbank’s mandate. To solidify the vision for long-term development for the country, the bank is not just savings for the immediate today but for nation building. This will help create a foundation for the country to have a reliable source of savings for national development at much better environment rather than borrowing from outside which is denominated in foreign currency. To this end, Postbank conducts resource mobilization as an aggregator. The bank collects savings from Kenyans. The savings are put together and invested in government securities whereby the government decides on the development plans.
The bank is set to have customer appreciation special events in all their 96 branches. “We are going to have events just to show our appreciation to customers, we will have small giveaways to customers who will visit the bank on this day just to remind them that we are proud of them for being able to save with us,” Mr Lekolool hints. Postbank is also keen on forging strategic partnerships to make the journey easier for organizations and other financial institutions to able to save with them.
The bank will hold an interactive social media campaign through facebook, twitter and instagram in a bid to reach the youths who are the majority of internet users. “The campaign will include challenges, we are going to have inspirational stories and testimonials just to raise awareness about savings and encourage not just students but all Kenyans to share their own savings journey and experiences,” Postbank MD emphasizes.
One of the guiding mandates of Postbank is to operate as a savings bank. To do that they have tailor made products which are convinient to customers. The popular product is the regular savings account. These types of accounts are meant for individuals and institutions to save conveniently. The mode of operations is varied: For people who are digitally smart, there are digital platforms, for people who want to visit the branches they have 96 branches and over five hundred agents where customers can make deposits and withdrawals from their phones.
Women play a critical role in the economy but often times due to cultural backgrounds they are barred from accessing banking services. To address this challenge Postbank has an exclusive product only for women called Waridi. This account is a personal transactional account and is geared towards attracting ladies to operate accounts. Waridi accounts have interesting features like there are no maintenance fees, they offer self service channels through mobile and internet services and a lot of requirements required to open or operate these accounts have been removed. Notably, requirements for Waridi are lower than other accounts to encourage women to save.
M-chama is another innovative product from Postbank addressing the need for savings by groups, chamas and societies. The creation of M-chama was informed by the need to ensure that small groups contribute positively towards economic development by delivering services associated with physically handling monies in the groups. Kenyans are known for forming small social groups for different purposes. M-chama accounts allow members to be informed of any activity that is happening to the account like any deposits or withdrawals thus facilitating transparency in the group. It makes the leaders to be accountable.
Fixed deposit account is another key product. They offer very competitive rates for this account. The account can be topped up through save as you earn. To derive the most value from this product, they offer personalized guidance on how to go about it. This account requires customers to commit their savings for a pre determined period for which the bank provides a secure way to grow their money while also enjoying the benefits of higher return.
Malcom X said education is the ticket for the future. Postbank has an account for children called Smata account which is very popular. It is basically designed for parents to save for their children’s future. This account is purposely created for the future education of children. Smart account gives parents a dedicated platform for setting aside funds for future use by their kids.