In an effort to take advantage of mobile phone penetration, Postbank Kenya has launched a new banking service. The mobile offering, which is called M-Chama, is geared toward small groups, KBC reported.
M-Chama is designed to make banking more convenient for groups: With the service, groups do not have to visit a brick-and-mortar location of a bank or automated teller machine (ATM) to conduct their transactions. Already, nearly 2,500 groups have registered for the service, and the company plans to bring on an additional 3,500 groups prior to the end of 2018.
As of now, over 45 million people in Kenya have a mobile phone. Banks are tapping into mobile banking, as telcos have rolled out services such as Eazzy and M-Pesa to reach consumers.
Mobile banking may not be taking off in all corners of the world, but in Kenya, it is having a significant positive impact, with the use of mobile banking lifting 194,000 or more Kenyan households out of poverty from 2008 to 2014. According to a Wall Street Journal report that looked at research from economists Tavneet Suri of MIT and William Jack of Georgetown University, the use of mobile phones enables poor countries to provide communications technology without building a landline network and also enables them to bypass traditional banks.
Over the course of the last decade, mobile money has reached the majority of Kenyan households, with around 110,000 so-called “agents” around Kenya operating from small kiosks where cash can be deposited and withdrawn. Once the money is deposited, Kenyans can spend it anywhere in the country.
Suri told the paper the kiosks act as debit cards. Mobile lets you “create relationships with people who are much farther away,” she said, noting the average transaction happens between people who are 120 miles apart. Without mobile banking, it would cost $5 in bus fare to deliver the cash — a lot of money for most Kenyans.