CARE, Equity Bank and Orange Launch Partnership to Connect Community Savings Groups to Banks Using Mobile Phones
First-of-its-kind technology will bring mobile banking services to savings groups in remote areas
NAIROBI, March 16, 2012: Today the global poverty fighting organization CARE, Equity Bank and mobile communications firm Orange launch an innovative partnership that, for the first time anywhere, will allow savings groups remote access to full-service banking using mobile phones.
CARE savings groups (known as Village Savings & Loan Associations, or VSLAs) will be able to open an Equity Bank account and deposit cash into interest-bearing group savings accounts without visiting a physical branch. This is made possible by the extensive network of Equity/Orange agents throughout Kenya.
To ensure account security, CARE, Orange and Equity Bank developed a first-of-its-kind security verification system that requires three VSLA members to provide PINs for every transaction; the electronic equivalent of the three-padlock VSLA metal lockbox that prevents any one person from accessing the group’s cash. Although individuals have accessed bank accounts with mobile phones before, this is the first system that allows groups the same type of secure mobile access. CARE VSLAs will be able to make cash deposits and withdrawals with Equity Bank/Orange agents near their homes, or at any Equity Bank branch.
Equity Bank’s Pamoja savings account offers a safe place to save, a 2.5 percent annual interest rate, no account maintenance or deposit fees, and minimal withdrawal fees. VSLAs will have 24-hour access to their accounts using the Eazzy 24/7 mobile phone platform. Using the same system, Equity will soon offer VSLAs loans.
“This is a pioneering NGO/private sector partnership that has potential to conveniently and affordably offer high quality retail financial services to millions of previously un-served people across Africa,” says Helene Gayle, president and CEO of CARE. “There is enormous unmet demand for financial services across the continent. We are particularly pleased to be working with Equity Bank and Orange, both of whom have shown deep commitment to designing products and services specifically to reach people in the poorest communities.”
25 CARE VSLAs in Nyanza’s Suba district will open savings accounts today. 175 additional VSLAs have received training and are expected to open accounts by September. If the initial launch is successful, Equity/Orange mobile bank accounts will be made available to all CARE-affiliated savings group in Kenya.
In Kenya alone, CARE has helped more than 450,000 people build VSLAs in their communities. VSLAs are typically built by women living on less than $2 per day. CARE provides each VSLA with one-year of intensive group-based saving and lending training. At weekly meetings, members make deposits to the group’s savings lockbox, as well as small loans to each other to start small businesses, pay school fees or meet household needs. Loans are repaid with interest which, in turn, is passed on to group members as earned interest on their deposits. VSLAs that express interest in linking to Equity Bank are assessed by CARE for their readiness, and receive financial literacy training to ensure they have the skills and knowledge needed to interact with a formal bank.
In recent years, mobile money platforms have quickly become trusted and popular tools in Kenyan households. Thanks largely to the spread of mobile technology, an estimated 40 percent of Kenyans now have access to formal financial services. However, among CARE VSLA clients, 70 percent of whom live below the $2 per day poverty line, only 10 percent had access to formal financial services prior to joining a VSLA.
“Community-managed VSLAs are an important first step to financial inclusion for many of the poorest households. VSLAs help vulnerable members develop financial skills and build assets. For many members, the merger of mobile payments with financial products specialized for groups will allow VSLAs to become an on-ramp for formal financial inclusion.” says Lauren Hendricks, Executive Director of CARE’s Access Africa program. “With crucial support from the Bill & Melinda Gates Foundation, CARE has worked closely with Equity Bank and Orange to develop a system that will allow VSLA members safe, reliable access to the financial services they want and need.”
About CARE: CARE brings financial services to more people in Africa than any other international non-governmental organization. Through its unique savings-led approach, CARE’s Access Africa program has reached more than 2.5 million people in 26 countries in sub-Saharan Africa.
Founded in 1945, CARE is a leading humanitarian organization fighting global poverty. CARE has more than six decades of experience delivering emergency aid during times of crisis. Our emergency responses focus on the needs of the most vulnerable populations, particularly girls and women. Women and girls are at the heart of CARE's emergency relief efforts because our experience shows that their gains translate into benefits for families and communities.
Essential to CARE's lifesaving humanitarian work is our commitment to help rebuild safer, stronger places that people call home. Our programs to improve health and education, promote social justice and open up economic opportunities make communities more resilient and less vulnerable to the forces that cause emergencies. Last year CARE worked in 84 countries and reached 122 million people around the world. To learn more, visit www.care.org.
About Equity Bank: Equity Bank commenced business on registration in 1984. It has evolved from a Building Society, a Microfinance Institution, to now the all-inclusive Nairobi Securities Exchange and Uganda Securities Exchange public listed Commercial Bank. With over 7.1 million accounts, accounting for over 50% of all bank accounts in Kenya, Equity Bank is the largest bank in Africa in terms of customer base and operates in Kenya, Uganda, South Sudan, Rwanda and Tanzania. For more information please visit www.equitybank.co.ke
About Orange/Telkom Kenya: Telkom Kenya is Kenya’s original telecommunications provider and is 51% owned by France Telecom and 49% by the Government of Kenya.
With fixed network, wireless, mobile and internet services, Telkom Kenya is the only truly integrated telecommunication solutions provider in the country. Orange Mobile, Orange Fixed Plus and Orange Broadband are Telkom Kenya’s GSM, wireless and internet services provided under its commercial brand, Orange. The national and only fixed line service, Telkom Fixed, is provided under the Telkom Kenya brand.
Telkom Kenya also has a broad business portfolio offered under the brand name Orange Business Services and continues to be a major provider within the country and region for wholesale traffic i.e. carrier to carrier, enabled by its vast fibre optic infrastructure.
Telkom Kenya has shareholding in both the TEAMs and EaSSy submarine cables and has over 4,400 terrestrial fibre infrastructure that runs across Kenya. The company therefore has the largest footprint within Kenya and has further interconnected to the wider Eastern Africa region thus enabling more people to connect, create and come together to achieve more.
Telkom Kenya’s current subscriber base stands at approximately 2.5 Million customers and the company remains committed to providing innovative, accessible and refreshingly simple communications solutions to its customers.