Octagon Pension Services Limited has launched a digital pension plan that gives workers in the informal sector with inconsistent income a flexible platform to save for their retirement. Dubbed Mobikeza, the product has an added unique advantage of allowing a contributor to make unlimited deposits and periodic withdrawals via USSD or an app.
So far 500 people have signed up for the product with the number expected to hit 1 million in the next 12 months. It was developed with the youth, Jua Kali artisans and workers in Micro-Small and Medium-Sized Enterprises in mind and has unmatched capability of convenience in on-boarding, tracking and access of funds all through the mobile with access to three types of investment funds namely; Ustawi Fund (Conservative), Hakika Fund (Guaranteed) and Usawa Fund (Balanced).
According to Octagon Pension Services Limited chief executive officer Godwin Simba, pension coverage rate in Kenya is significantly low at 20% compared to the 80% coverage that is currently witnessed in the developed economies. To boost this coverage, he explains, there is a need to focus on the informal sector, which constitute 35% to 50% of the economy in developing countries such as Kenya.
“We believe that Mobikeza will be able to address the needs of the informal sector that require a flexible and affordable product that will be able to show daily, monthly and yearly yields, in turn, boost the saving culture and guarantee a comfortable life after retirement,” said Simba.
Mobikeza is powered by Octagon and is anchored under the Octagon Personal Pension Scheme, registered and regulated by the Retirement Benefits Authority. The solution’s platform is integrated with MPESA and the Bank’s platforms. Octagon has invested Sh10 million in the development of the solution.
“Through such micro-pension innovations, key players such as Octagon are able to convert awareness into enrolment and widen pension coverage in the country. We also have Government support through the Treasury and with support of the World Bank to increase pension penetration,” said Nzomo Mutuku, Retirement Benefits Authority chief executive officer.
The Regulator lauded the need for innovation to accommodate the informal sector unlike the current pension plans that are mostly designed to cater to the formal sector in terms of access and contributions.
Customers can register and activate Mobikeza without the need to visit any physical office or fill out forms. It can be accessed by dialing USSD code *483*8000# or by downloading the app version, which is available on Google Play Store and Apple Store.