Your phone is no longer just a device used for making calls or surfing the internet; you can now use it as a platform to boost your savings under different products provided by telecoms.
The approach is one of the ways that will help encourage savings mobilisation in the country, besides easing access to formal financial services for the majority of Rwandans.
Already, Tigo Rwanda operates its Tigo Sugira savings, while other local telecoms are planning to join the bandwagon. The telecom firm pays savers 7 per cent per annum, and has just disbursed quarterly interest payment to the over 18,000 Sugira account holders.
Faith Chisulo, the Tigo Rwanda head of mobile financial services, said the telecom has paid over Rwf9 million in interest payments since the mobile savings product was introduced a year ago.
The telecom is working with Urwego Opportunity Bank (UOB) to run the facility.
She said the partnership with UOB enable the firm to advance technology to ensure that financial services are affordable and accessible to the masses. It has also helped put the telecom at the forefront of digital innovation in the financial services industry.
“Since Tigo Sugira launch last year, we have processed over half a million individual transactions and accumulated savings deposits of over $1.5 million. We continue to enhance the savings product to cater for customer needs, which include fixed savings for groups and individuals,” she added.
Chisulo said they have processed over half a million individual transactions, and accumulated savings deposit of over $1.5 million (Rwf1.2 billion) over the period.
The mobile savings account will bring on board unbanked masses into the formal financial sector, according to Sunny Ntayombya, the Tigo corporate communication and government relations manager. He said, whereas financial institutions pay savings account holders interest annually, Tigo Sugira users are paid quarterly.
“The 7 per cent annual interest payment is paid in four quarterly installments of 1.75 per cent. We take the balance at the end of each day during the period, and calculate average balance across all the days, and that is the balance to which we apply the interest,” he explained.
Commercial banks pay an average of 7.59 per cent (as at December 2015). Ntayombya said the firm is looking to digitise both individual and group savings accounts, adding that the telecom targets 15 per cent of its base to be using Tigo Sugira by the end of the year.
“We are also working to introduce features like fixed deposits with a higher interest rate and specific savings product for savings group and we are planning to work with other banks,” Ntayombya said.
Tigo Sugira is the first savings account on mobile in Rwanda.
Customers speak out
Fils Sindambiwe, a business owner in Nyamirambo, a Kigali suburb, said he has been able to start a small shop using savings from his Tigo Sugira account.
“The accounts will help improve Rwanda’s savings culture since it’s done on mobile phones,” Sindambiwe said.
Moses Kamarade, a Tigo agent, said the quarterly payments will enable clients to save more money through accumulated deposits.
Tigo Rwanda has over three million customers of the total 8.807 million subscribers shared between the three telecom firms, including MTN and Airtel.
Similar services locally and in the region
Kenya’s biggest telecom firm, Safaricom, has Lock savings account which allows customers to save a minimum of Ksh500 within six months at 6 per cent interest rate annually. The micro savings and lending facility has some similarities to Tigo Sugira savings product.
Locally, MTN is planning to provide such a facility going forward, according to Norman Munyampundu, the firm’s business general manager.