M-Pesa is a mobile money service that allows you to use your phone to send and receive money, pay bills, buy airtime, and access other financial services. It is popular in Kenya, where it has over 40 million active consumers and over 200,000 agents.
But did you know that M-Pesa can also assist you in saving money and reaching your financial objectives? M-Pesa is also an excellent tool for budgeting and saving money, whether you want to save for an emergency, save for a specific purpose, or invest for the future.
In this article, we will demonstrate how to use M-Pesa to save money in an efficient and secure manner. Here are some pointers to get you started, but first, let’s go through the fundamentals.
What exactly is M-PESA?
Here’s some background information. Safaricom, Kenya’s largest mobile network operator, launched M-PESA, a mobile money service, in 2007. M-PESA is Swahili meaning mobile money or mobile payment. M-PESA allows you to save money in an electronic account linked to your Safaricom SIM card and use it to make mobile phone transactions. You can deposit and withdraw money from your M-PESA account at any of the country’s 600,000 approved agents.
You can also transfer funds to other M-PESA customers or mobile money users on other networks. You can also receive funds from other countries via international remittance providers. You can also use M-PESA to pay for goods and services at businesses who accept it. M-PESA also provides access to other financial services including as loans, savings, insurance, and investments.
How may M-PESA be used to save money?
One of the advantages of utilizing M-PESA is that it has tools and features that can help you save money quickly and effortlessly. Depending on your needs and interests, you can utilize M-PESA to save money in a variety of ways. Here are a few examples:
Make use of M-Shwari
M-Shwari is a service that lets you save money and borrow money using your M-Pesa account. By dialing *334# on your phone, you can open a free M-Shwari account. You can then deposit funds from your M-Pesa account into your M-Shwari account and receive interest on your savings.
The current annual interest rate is 6.65%, compounded monthly. M-Shwari also offers loans based on your credit score and repayment history. The loan amount ranges from Ksh 100 to Ksh 50,000, with a 30-day repayment period. A one-time fee of 7.5% of the loan amount is charged.
M-PESA for Lock Savings Account
This is a program that allows you to put money aside for a set length of time and earn interest on it. By dialing *334# on your phone, you can open an M-PESA Lock Savings Account. You can then select the amount you want to save, ranging from Ksh 500 to Ksh 100,000, as well as the time, ranging from one month to six months. The current monthly compounded yearly interest rate is 6%. You are not permitted to withdraw your funds prior to the maturity date unless you pay a penalty fee of 1% of the locked amount.
Make use of KCB M-PESA
This is a service provided by KCB Bank that allows you to save money and get loans using your M-PESA account. To open a KCB M-PESA account, call *334# from your phone. You can then transfer funds from your M-PESA account to your KCB M-PESA account and receive interest on your savings.
The current annual interest rate is 6%, compounded monthly. Loans from KCB M-PESA are also available based on your credit score and payback history. The loan amount is between Ksh 50 and Ksh 1 million, with repayment terms ranging from one month to twelve months. The loan has a monthly interest rate of 1.16% and a negotiating fee of 2.5% of the loan amount.
Make use of Fuliza.
When you have insufficient funds to complete a transaction, you can use your M-Pesa account to access an overdraft facility. You can enroll in Fuliza by dialing *234# from your phone.
When you have insufficient cash in your account, you can utilize Fuliza to pay for goods and services at merchants that accept Lipa Na M-Pesa (Pay with M-Pesa) or to send money to other M-Pesa users. Within 30 days, you must repay the overdraft amount plus a daily fee of 1% of the outstanding balance.
This interest rate is lower than what you’ll find elsewhere, so it’s a good approach to save money and establish discipline rather than raiding your savings every time you’re in a bind.
Make a savings goal and keep track of your progress
A specific and attainable objective might inspire you to save more and prevent wasteful spending. Set a savings goal and track how much you’ve saved so far with the M-PESA or MySafaricom apps. To help you stay on track, you may also create reminders and notifications.
Participate in a savings group or chama (M-PESA Chama Account).
A savings group, often referred to as a chama, is a collection of people who pool their funds and lend it to one another with minimal interest. This might assist you in saving money for a common goal such as starting a business, purchasing land, or paying school expenses.
You can use M-PESA Chama Account, which allows you to manage your savings group with your M-Pesa account. You may use your phone to start a group, invite members, collect contributions, issue loans, and view reports.
Simply stroll into any Safaricom shop or Safaricom Care desk across the country and request an application form to gain access to M-PESA Chama. You can also text the phrase CHAMA to 21366 or email them at [email protected], and one of their agents will respond.
How to Track Your Expenses with M-PESA
Tracking and staying on top of your costs is essential in any saving venture. In the next section, we will look at how you may utilize M-PESA to keep track of and manage your expenses, decreasing them to increase your savings.
Pay for goods and services with M-PESA
M-PESA can be used to pay for goods and services at thousands of merchants across the country instead of cash or cards. You can save money by avoiding transaction costs, ATM fees, and fraud concerns.
Discounts and prizes are also available from partnering shops. To pay using M-PESA, phone *334# and follow the directions, or scan the QR code with the M-PESA or MySafaricom apps.
This also provides you with a paper trail that you may use to track your costs via the mini-statement that you can request from Safaricom on-demand.
use M-PESA Global To send and receive money worldwide
If you have relatives or friends in other countries that send you money, or if you need to send money abroad, you may do so easily and economically using M-PESA Global. Using your M-PESA account, you can send money to over 200 countries and receive money from over 50 countries.
You can also withdraw money from any Western Union agent or ATM anywhere in the world. Dial 840# or *3342# and follow the steps to access M-PESA Global. This allows you to have several financial inputs while also providing you with a paper trail to manage your expenses.
Final thought
These are just a few ways you can utilize M-PESA to increase your financial security and save money. M-PESA is a tool that can help you realize your aspirations and is more than just a mobile money service. With M-PESA, you can start saving today and notice the difference.