M-Pesa is a mobile money service that allows you to send and receive money, pay bills, buy airtime, and access other financial services using your phone. It is widely used in Kenya, where it has over 40 million active customers and more than 200,000 agents.
But did you know that M-Pesa can also help you save money and achieve your financial goals? M-Pesa is also a great tool for saving money and taming your expenses, whether you want to build an emergency fund, save for a specific goal, or invest for the future.
In this blog post, we will show you how to use M-Pesa to save money effectively and securely. Here are some tips and tricks to get you started but first, let’s deal with the basics.
What is M-PESA?
Here’s a little history lesson. M-PESA is a mobile money service that was launched in 2007 by Safaricom, the largest mobile network operator in Kenya. M-PESA stands for mobile money or mobile payment in Swahili. M-PESA allows you to store money in an electronic account linked to your Safaricom SIM card, and use it to make transactions with your mobile phone. You can deposit and withdraw cash from your M-PESA account at any of the over 600,000 authorized agents across the country.
You can also send money to other M-PESA users, or to mobile money users on other networks. You can also receive money from abroad through international remittance partners. You can also pay for goods and services at merchants that accept M-PESA as a payment method. You can also access other financial services such as loans, savings, insurance, and investments through M-PESA.
How to use M-PESA to save money?
One of the benefits of using M-PESA is that it has built-in tools and features that can help you to save money easily and conveniently. There are several ways you can use M-PESA to save money, depending on your needs and preferences. Here are some of them:
M-Shwari is a service that allows you to save money and access loans through your M-Pesa account. You can open an M-Shwari account for free by dialing *334# on your phone. You can then deposit money into your M-Shwari account from your M-Pesa account, and earn interest on your savings.
The interest rate is currently 6.65% per annum, compounded monthly. You can also access loans from M-Shwari based on your credit score and repayment history. The loan amount ranges from Ksh 100 to Ksh 50,000, with a repayment period of 30 days. The loan attracts a one-time fee of 7.5% of the loan amount.
Use M-PESA Lock Savings Account
This is a service that allows you to lock away a specific amount of money for a fixed period of time, and earn interest on it. You can open an M-PESA Lock Savings Account by dialing *334# on your phone. You can then choose the amount you want to save, from Ksh 500 to Ksh 100,000, and the duration, from one month to six months. The interest rate is currently 6% per annum, compounded monthly. You cannot withdraw your money before the maturity date, unless you pay a penalty fee of 1% of the locked amount.
Use KCB M-PESA
This is a service that allows you to save money and access loans through your M-PESA account in partnership with KCB Bank. You can open a KCB M-PESA account by dialing *334# on your phone. You can then deposit money into your KCB M-PESA account from your M-PESA account, and earn interest on your savings.
The interest rate is currently 6% per annum, compounded monthly. You can also access loans from KCB M-PESA based on your credit score and repayment history. The loan amount ranges from Ksh 50 to Ksh 1 million, with a repayment period of one month to twelve months. The loan attracts an interest rate of 1.16% per month and a negotiation fee of 2.5% of the loan amount.
This is a service that allows you to access an overdraft facility through your M-Pesa account when you have insufficient funds to complete a transaction. You can opt-in for Fuliza by dialing *234# on your phone.
You can then use Fuliza to pay for goods and services at merchants that accept Lipa Na M-Pesa (Pay with M-Pesa), or send money to other M-Pesa users when you have insufficient funds in your account. You will then repay the overdraft amount plus a daily fee of 1% of the outstanding balance within 30 days.
This interest rate is lower than what you will find anywhere else and so it is a way to save money, instill discipline instead of vandalizing your savings every time you’re in a pinch.
Set a savings goal and track your progress.
Having a clear and realistic goal can motivate you to save more and avoid unnecessary spending. You can use the M-PESA app or the MySafaricom app to set a savings goal and monitor how much you have saved so far. You can also set reminders and alerts to help you stay on track.
Join a savings group or a chama (M-PESA Chama Account)
A savings group or a chama is a group of people who pool their money together and lend it to each other at a low-interest rate. This can help you save money for a common purpose, such as starting a business, buying land, or paying school fees.
You can use M-PESA Chama Account, a service that allows you to manage your savings group using your M-Pesa account. You can create a group, invite members, collect contributions, disburse loans, and view reports using your phone.
To access M-PESA Chama, simply walk into any Safaricom shop or Safaricom Care desk countrywide and request for an application form. You can also send an SMS with the word CHAMA to 21366 or email them on [email protected] and one of their agents will get back to you..
How to use M-PESA to Track your Expenses
A key factor in any saving venture is to track and stay on top of your expenses. In this next section, we will be looking at ways you can use M-PESA to keep an eye on and stay on top of your expenditure, minimizing them to enhance your saving.
Use M-PESA to pay for goods and services.
Instead of using cash or cards, you can use M-PESA to pay for goods and services at thousands of merchants across the country. This can help you save money by avoiding transaction fees, ATM charges, and fraud risks.
You can also enjoy discounts and rewards from participating merchants. To pay with M-PESA, dial *334# and follow the prompts or scan the QR code using the M-PESA app or the MySafaricom app.
This also gives you a paper trail that you can use to track your expenses via the mini-statement that you can request for on-demand from Safaricom.
Use M-PESA Global to send and receive money internationally.
If you have relatives or friends abroad who send you money or if you need to send money overseas, you can use M-PESA Global to do so conveniently and affordably. You can send money to over 200 countries and receive money from over 50 countries using your M-PESA account.
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You can also withdraw money from any Western Union agent or ATM worldwide. To access M-PESA Global, dial *840# or *334*2# and follow the prompts. This allows you multiple cash inflows and also gives you a paper trail that you can use to track your expenses.
These are some of the ways you can use M-PESA for saving money and improve your financial well-being. M-PESA is more than just a mobile money service; it is a tool that can help you achieve your dreams. Start saving today with M-PESA and see the difference!