Kenya - Samburu Teachers Cooperative Savings and Credit Society Ltd

Bridging the gap with a mobile phone

With the touch of a button, members of a Kenyan savings and credit cooperative (SACCO) can now receive important health information and make bank transactions quickly and safely. A joint mobile banking project between Oikocredit and its partner Samburu Teachers SACCO has resulted in vital improvements in financial services and access to information for people in this remote district in Kenya’s north.

Poor road infrastructure, remote areas and security risks mean travelling 50 km to a bank branch could take up to five hours.

“To overcome these challenges and serve its clients well, Samburu Teachers SACCO needed to be innovative in the way it does its business,” said Oikocredit East Africa’s capacity building coordinator Elikanah Nganga. “It was out of this realization that they asked Oikocredit to support the mobile banking project.”

Banking from a phone
The mobile banking technology runs on any mobile phone, and processes in real time using Global System Mobile Communications (GSM) technology. The menu offers banking options including deposits, withdrawals, balance enquiries, money transfers and mini-statements. It allows clients and members to open accounts and make transactions without travelling to a SACCO branch.

An essential part of the programme’s success was for local mobile provider Safaricom to agree to link its money transfer service – M-PESA – with the SACCO’s mobile phone platform. “The link to M-PESA was critical to ensure clients and members of the SACCO could access their funds and make deposits via M-PESA agents, who are located at kiosks in most villages in the region,” said Mr Nganga.

The programme has also seen benefits for the teachers’ cooperative. The ease of the new mobile banking facilities has dramatically increased the number of new members and cashflow has improved because of more accessible deposit facilities. Mobile banking has also resulted in reduced operational costs as bank branches now require one staff member. These savings for the SACCO mean more resources for community projects including food security, building classrooms and community training.

Offering more than finance
Oikocredit committed € 20,000 from its capacity building funds to develop this mobile banking project over two years. The funding will be accompanied by ongoing advice and support from Oikocredit Kenya’s country staff. The cooperative itself will contribute € 7,500 to cover other operational costs including training, travel, computer and servers. Oikocredit has allocated almost € 500,000 to its capacity building fund, which will finance additional projects in agricultural finance, social performance management, risk management and market development in coming years.

A solid partnership
The SACCO was established in 1980 to provide savings and credit to teachers, but has since expanded to include other community members in Kenya’s Samburu region. The 700 cooperative members are divided between production (agriculture and manufacturing), services and commerce industries, and many are located in remote areas. About 90% of people in the area live on less than USD 2 each day. Part of the SACCO’s mission is to utilize new technology and innovative banking solutions. By providing a safe, branchless method of financial transactions, clients can be in control and closer to their savings and credit. Samburu Teachers SACCO has been an Oikocredit partner since it received a loan of KES 28.8 million (around € 255,000) in 2004. A second loan of KES 35 million was issued 2008 with the aim of increasing lending capacity to members and clients. Last year, Kenya was hit with the worst drought in five decades. Oikocredit donated € 5,000 to Samburu Teachers SACCO to assist them in their emergency efforts.

 

Date last revised: 13-4-2012

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