Firm targets casual workers with Sh1 pension product

Financial services provider Octagon Pension has launched a mobile-based savings plan as it eyes one million informal sector workers by August next year.

Octagon chief executive Godwin Simba said the product, dubbed Mobikeza, will allow individuals to save as little as Sh1 through their mobile phones. The product also allows individuals to make withdrawals after 14 days.

“We are looking at increasing the number from the current 5,000 members to about one million in under 12 months and increase pension cover among Kenyans in the informal sector,” Mr Simba said yesterday.

The informal sector has an estimated 15 million workers.

Individuals can access the savings platform through the USSD code *483*8000# or by downloading the app which is available on the Google Play Store and Apple Store

This is the firm’s second product tailored for the informal sector after its ‘Mbao’ pension plan launched in January 2012 that allows individuals to save Sh20 per day towards their retirement.

Other pension plans including the National Social Security Fund allow M-Pesa contributions of at least Sh200 in efforts to widen safety net coverage in the country.

Octagon’s plan to deepen pension coverage comes months after industry regulator, Retirement Benefits Authority (RBA), said it targets to more than double pensions savings to Sh2.4 trillion in the next five years, riding on mobile phone-based products.

RBA is targeting at least 600,000 new pension contributors every year by reaching out to segmented groups riding on innovative solutions like mobile-based savings plans that offer convenience and flexibility.

Pension coverage currently stands at 20 percent but the Treasury has in the past said that this is not sufficient relative to the size of Kenya’s gross domestic product.