Developed in partnership with FSD Kenya, M-Chama enables Savings Groups to open both group and individual digital savings accounts with Kenya Post Office Savings Bank, making deposits and withdrawals, and transferring funds between accounts. Members can also check balances, receive SMS notification on account activity, and send feedback to the bank. All transactions take place at group meetings, either through mobile money platforms such as M-Pesa, Airtel Money, or Yu Cash linked to M-Chama, or through a Postbank agent attending the meeting. The application is comprised of 1) an agent mobile application used to register and open accounts for new groups and individual members and 2) a group mobile application and a web portal for members to transact on their accounts. M-Chama aims to improve group recordkeeping, the security of group assets, and access to formal financial services – it is not intended to replace group meetings.
By the end of its first year of operations in 2017, M-Chama had nearly 2,000 group accounts with over 40,000 users, and nearly $29m in savings deposits, and reduced the acquisition of low-income clients by about 40 percent. Development organizations and financial services providers that are exploring similar solutions should note the following factors that have contributed to the uptake and results of M-Chama: firstly, digital and financial infrastructure in Kenya, including Postbank’s existing agent network and mobile collection points; secondly, strategic partnerships with development organizations such as Catholic Relief Services and CARE International to facilitate uptake and reduce dormancy rates; thirdly, while the application itself is free to groups, and there is only a one-time administrative fee of $0.50 per account, members have voiced concerns over data charges imposed by mobile network operators and digital wallet providers, as well as fees incurred for withdrawing funds.