Family Bank links accounts to M-Pesa

By Macharia Kamau

Family Bank has unveiled a mobile banking service to ease business transactions, and cut the bank’s operational costs.

The service, which will see bank accounts linked to M-Pesa accounts, will enable customers deposit money into their accounts using their cell phones, and top up M-Pesa accounts.

"By bridging the gap between the M-Pesa function on the mobile phone and their bank accounts, our customers will be able to enjoy convenience and security when transferring money through M-Pesa," said Peter Kinyanjui, Family Bank’s chief executive, said at the launch of the service dubbed ‘Pesa Pap’.

Readily accessible

"The bank is committed to making modern banking services readily accessible to all Kenyans," Kinyanjui added.

The banking sector expects to use mobile money transfer service to increase uptake of banking products, especially in rural Kenya. Family bank’s Pesa Pap comes barely a month after Equity Bank and Safaricom jointly launched M-Kesho.

Although it was initially seen as competition for banks, the money transfer services run by mobile phone operators have become allies to banks seeking to extend the reach of their financial services, especially in areas that are not served by banking infrastructure.

Central Bank Governor, Njuguna Ndungu, said high costs and physical distance have contributed to the high operation costs among banks, and forcing them to shy away from venturing into many rural areas. He, however, said he expects these costs to drop as more banks take up mobile banking.