Scale2Save Campaign

Micro savings, maximum impact.

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The development of M-KOBA

Tanzania Commercial Bank Plc (TCB) previously called TPB Bank Plc has always championed financial inclusion by providing services and products to serve the population at the bottom of the pyramid.

TBD conducted a three-year project (2018-2020) with USD 1 million provided by the Mastercard Foundation for the Savings at the Frontier (SatF) programme (Digitizing Informal Saving Mechanisms) and overseen by Oxford Policy Management (OPM). The goal was to bring on board 250,000 customers by 2020 of whom 20,000 would be purely rural. TCB launched the project in 15 locations, all in rural areas. The project led to the development of a pure digital group saving product called M-KOBA.

Launched in January 2019, M-KOBA is a mobile based product meant to facilitate group saving and provides solutions to five challenges that many formal and informal savings groups in Tanzania currently face. These are the challenges and the way M-KOBA addressed them:

  1. Security: Banking through this mobile account, the security of funds of customers is high, compared to the traditional saving mechanisms they normally use.
  2. Transparency: The whole process starting from customer registration to fund transfer (depositing) is transparent in the sense that all group members are involved.
  3. Convenience: The M-KOBA product is very easy for customers to understand and use. With M-Koba, individual members can contribute, apply for a loan and vote through their mobile phones, without physically convening in one place.
  4. Cost effectiveness: All customers transactions via M-KOBA are free of charge except for balance checks which are available for a small fee.
  5. Accessibility: M-KOBA is accessible anytime and anywhere, through the customer’s mobile phone.

Taking it further

To extend the project further, in October 2020, TCB entered into a partnership with Plan International Tanzania (Plan).

Plan is a child centered organization that advances children’s rights and equality for girls. Plan has been working in five thematic areas: Child protection, Maternal, Neonatal and Child Health and Nutrition (MNCH&N), Equal access to basic education, Water, Sanitation and Hygiene (WASH) and Youth Economic Empowerment (YEE).

Plan’s YEE programs have been supporting vulnerable youth, especially young women and their families to improve livelihoods. This through provision of market relevant skills, support formation of Village Savings and Loans Associations (VSLA) and by facilitating linkage to private sector economic opportunities. VSLAs are informal, have simple record keeping, and members have full ownership and control. This methodology enables VSLAs to provide basic financial services to people in remote areas that lack infrastructure. The group members are 80% women and their main economic activity is agriculture. However, VSLAs face some limitations in offering financial services to its members, including:

  1. The safety of the money is not guaranteed, as VSLA save their money in metal boxes at home.
  2. At the initial parts of a cycle, the group has little money, which makes it difficult to meet its members’ credit needs.
  3. At times, when the loan demand is low, the group has excess liquidity and would rather save these excess funds in a bank account, where the money is safe and can earn some interest instead of lying idle.
  4. Since the loans from the group are based on member’s savings, the group is unable to provide larger loans. Also, the tenure of the loans is short, which is not appropriate for investing in income generating activities which have a longer pay-back period.

In order to address these limitations faced by the VSLAs, Plan and TCB entered into a partnership, whereby TCB would provide 2 products:

  1. M-KOBA, a digital form of saving money, accessing loans and sharing earnings to VSLA members. M-KOBA provides security of the VSLAs’ money, increase transparency and simplicity for members to contribute through mobile agency banking M-Pesa. M-KOBA digitalizes the VSLA processes and increases safety by using bank or M-Pesa savings accounts.
  2. Group savings products and potentially/eventually other bank products and services to the VSLAs formed i.e. Group loans and Group Life insurance.

Photos: ​Between August and October 2021 in Isanzu, Nyang’ingi, Sangabuye and Laela villages, saving group representatives met with TCB and Plan team to be trained on how to use M-KOBA, group loans application processes and life insurance.