In a bid to encourage a saving culture among Kenyans, the Central Bank of Kenya has issued new guidelines that abolish the levy charged on accounts by banks, which are expected to be enacted this coming July. Most commercial banks often charge a monthly maintenance on accounts, ledger fees or cash handling fees. These guidelines will also see interest paid on money held in savings accounts.
This comes a few weeks after the World Bank released a report indicating that the world’s poor are “unbanked” or do not use a formal financial institution mostly because of the charges that come with opening an account and maintaining one. Other reasons given in this survey done in 2011 were physical distance from banks, and lack of trust in these institutions. The report encouraged policy makers to use the research in order to make sure that people have access to financial services.
The new guidelines are part of a Bill which was proposed in 2002 by MP Joe Donde. According to the legislator, Kenya lacks savers because saving had become like a punishment. “One was paid little if any returns and charged as if you are operating a current account,” he said, speaking to Business Daily. These new guidelines will most likely enhance not just a savings culture among Kenyans, but economic opportunities among the ‘unbanked’ poor.