By Juliet Omelo: NAIROBI, Kenya, Aug 28 – A local insurance brokerage and pension service provider – Octagon Pension Services Limited – has launched a new digital pension plan that gives workers in the informal sector a flexible platform to save for their retirement.
The pension plan Dubbed “mobikeza” targets the youth, jua kali artisans and micro-small and medium sized enterprises. It allows a contributor to make unlimited deposits and periodic withdrawals via Unstructured Supplementary Service Data (USSD) or a downloaded application, unlike other pension plans.
Speaking during its launch, Octagon Managing Director Wilson Nzomo on Tuesday stated that Mobikeza has unmatched capability of convenience in on-boarding, tracking and access of funds all through mobile platforms with access to three types of investment funds namely; Ustawi Fund, Hakika Fund and Usawa Fund.
Mobikeza, unlike the current pension plans that are mostly designed to cater for the formal sector alone, will accommodate the growing informal sector which has been left behind over the years and aims at expanding coverage in the informal sector.
“Pension coverage rate in Kenya is significantly low at 20 per cent compared to the 80 per cent coverage that is currently witnessed in the developed economies. To boost this coverage, there is a need to focus on the informal sector who constitute 35-50 per cent 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,” Octagon CEO Godwin Simba said.
The Retirement Benefits Authority (RBA) Chief Executive Officer Nzomo Mutuku termed the launch of the product as timely with a key focus of increasing penetration of pension plans.
“As RBA, we are honored to see such great strides by Octagon in targeting a critical mass- the informal sector that comprises of 83 per cent of the total workforce,” Mutuku said.
This development will allow self-employed youths in the informal sector to secure their retirement days through the mobile-based saving plan.