Regulator eyes 30pc increase in pensions uptake
By Graham Kajilwa | December 7th 2021
The restructuring of the local pension funds has failed to attract the informal sector, atop State official has said.
The Retirement Benefits Authority (RBA) Chief Executive Nzomo Mutuku said yesterday that traditional pension scheme products have proved unsuitable for the population hence the need to embrace technology to increase penetration.
RBA targets to increase coverage to 30 per cent by 2024. “Traditional pension scheme products are not suitable for the informal sector. We need to leverage technology to come up with products that can suit the needs of the informal sector,” he said.
Mutuku said increasing coverage is pegged on the right policy and regulatory framework, education and sensitisation, and technology and innovation. He noted that while the industry's asset base has grown to Sh1.478 trillion as of June 2021, coverage has remained low.
This is despite coverage standing at 22 per cent, a paltry growth of 10 per cent compared to 20 years ago.
Mutuku, who was speaking at the launch of a WhatsApp pension plan, a product of Zamara Group, said the informal sector is made up of 80 to 85 per cent of the country's workforce.
The WhatsApp product is an extension of Zamara’s Fahari Retirement Plan - a digitised pension and savings solution accessible through multiple channels including USSD code, website and agents.
“Through the innovation, we are launching today, technology will play an important part in helping us to reach the untapped market and create a saving culture,” said Zamara Group Chief Executive Sundeep Raichura.
Raichura said with a reach of 12 million users on WhatsApp in Kenya, Zamara is positioning itself to bring in more people into the pension and insurance.
Former ICT Principal Secretary and University of Nairobi lecturer Bitange Ndemo, who was the chief guest, urged the industry to develop more products around emerging technology for the financial services sector.
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