Mobile money joint venture M-Pesa is moving into the banking market through a partnership with Kenya's Equity Bank to offer subscribers an interest-bearing savings account, M-Kesho.
Under the agreement, Kenya's 9.4 million M-Pesa users will have access to mobile microsavings, microinsurance, and other banking services with Equity Bank. The application is capable of auto-scoring a customer's credit rating using a six-month history of his M-Pesa balances.
James Mwangi, CEO of Equity Bank, says: "Now, Kenyans will have self-service savings accounts on cell phones. When these accounts are linked though M-Pesa, we will be the most-banked country in Africa and the developing world."
A recent report by World bank think tank CGAP found that nearly one in three of the informants in Kibera (an informal settlement in Nairobi) kept a balance in their M-Pesa accounts. A survey conducted in 3000 homes in Kenya found this number to be even higher.
Speaking at the M-Kesho launch in Nairobi, CGAP acting CEO Alexia Latortue says: "Today, Kenya is sending a message to the world: poor people want savings accounts. Mobile banking is a powerful way to deliver savings services to the billion people worldwide who have a cell phone but not a bank account."
Earlier this year, Kenyan wireless operator Safaricom struck a deal with Equity Bank that enables M-Pesa mobile money transfer customers to access their funds at ATMs around the country.