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Naivas Supermarket has launched a micro-savings product, which will see its customers save their spare change while doing shopping.
The product dubbed ‘Uonga’ meaning saving in Zulu, has been birthed through a collaboration between the retailers and SaveApp Group, United Bank for Africa Kenya (UBA Kenya) and the underwriter Octagon Africa.
SaveApp Group is a Kenyan based technology company.
According to Naivas, the micro-savings product will go a long way to reduce the burden that has forced it to issue at least Ksh.100,000 monthly in each of its branches to cover the challenge of coins and change.
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“We put at least KES.100,000 per month per branch to cover the challenge of coins and change. For our 75 branches, we are looking at a float of not less than Ksh.7.5 million. Through Ukonga, we will be able to overcome our daily spare change dilemma as we also contribute towards encouraging a savings culture for our customers,” said Naivas Corporate sales manager Patrick Pere.
Traditionally, supermarkets have been forced to issue coins or sweets in cases where the coins are unavailable.
Once registered with Ukonga, customers will be left with an option of selection for savings in either the Retirement Benefits Authority (RBA), regulated Octagon pension savings, UBA savings or holiday savings.
“What I like about this idea is the huge impact it has not only to us as Kenyans and Africans but the globe in terms of the mass population because it’s extremely interesting that at this point in time we have over 900 million people in this continent with no form of any savings. We need to save for our pension,” said Mr. Abdulaziz Mohammed, the Chief Executive Officer of Save App Group Limited.
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Speaking during the launch UBA Kenya Chief Executive Officer Mr. Chike Isiuwe affirmed the bank’s commitment to leverage on the product to increase its clientele base.
“For us, this is what financial inclusion looks like. It is getting all people, young and old, to appreciate that savings are the foundation of growth. As the banking partner of Ukonga, this product is very critical to our agenda,” said Mr. Isiuwe.
According to Octagon Africa, the pension industry has accumulated about Ksh.1 trillion worth of assets in the country and only 3 million people are saving for pension in a population of close to 15-18 million potential people who can save. This leaves a gap of about 80 percent that is yet to be reached.
Octagon Africa Executive Director of Strategy and Product Development Godwin Simba said Ukonga will bolster the growth of the pension sector in Kenya
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“The pension penetration has stalled at 12 percent and member participation continues to reduce particularly in the private sector, mainly contributed by adverse effects of the pandemic. This has heightened the need for more digitally inclined solutions that encourage small daily steps of saving opportunities as we build towards a healthy savings culture,” said Simba.
Ukonga is now available in Kenya on USSD and on an Application as partners now target to roll out the product across Africa in the coming months.