Octagon Pension Services Limited has launched a new innovative digital pension plan that gives workers in the informal sector with inconsistent income a flexible platform to save for their retirement.
Dubbed MOBIKEZA, the product has an added unique advantage of allowing a contributor to make unlimited deposits and periodic withdrawals.
Octagon claims that MOBIKEZA was developed with the youth, Jua Kali artisans and workers in Micro-Small and Medium-Sized Enterprises (MSMEs) in mind.
Growing the pension sector coverage
It has three types of investment funds namely; Ustawi Fund (Conservative), Hakika Fund (Guaranteed) and Usawa Fund (Balanced).
“Pension coverage rate in Kenya is significantly low at 20 per cent compared to 80 per cent in 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,” said Octagon Pension Services Limited CEO Godwin Simba.
He added 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 is committed to growing the Pension Sector coverage by simplifying access and understanding of the pension industry through innovative technology platforms and educating the informal sector on the benefits of saving for retirement, the yields of such investments and how to track your funds,” he added.
MOBIKEZA is anchored under the Octagon Personal Pension Scheme, registered and regulated by the Retirement Benefits Authority. The solution’s platform is integrated with M-Pesa and Banks.
“The launch of MOBIKEZA is extremely timely with a key focus of increasing penetration of pension. As RBA, we are honoured 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,” said Nzomo Mutuku, Retirement Benefits Authority Chief Executive Officer.
He added, “Through such micro-pension innovations, key players such as Octagon are able to convert awareness into enrolment and widen pension coverage in the country. We also have Government support through the Treasury and with support of the World Bank to increase pension penetration.”
The Regulator lauded the need for innovation to accommodate the informal sector unlike the current pension plans that are mostly designed to cater to the formal sector in terms of access and contributions amount.
Octagon has invested KShs 10 Million in the development of the solution.
Customers can register and activate MOBIKEZA on a USSD code or by downloading the app.
Pension schemes in Kenya
There are different types of retirement schemes Kenya.
The National Social Security Fund (NSSF) is the statutory government scheme but one can also enrol in an Individual pension plan or they can be under the occupational scheme which is usually set up by an employer.