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Most people know M-Shwari for that quick loan when you are in a fix, but did you know that M-Shwari is also a savings account?

How M-Shwari Savings Account Works

M-Shwari similar to a bank savings account linked to your M-Pesa wallet. A good way of envisioning this is to think of your bank current account (that you use for transactions), coming with a free savings account linked to it. This means that you can freely move money across both accounts at no charge, and the savings account earns you some interest.

Currently, the M-Shwari savings rate is set by the Banking Act, and is set at 7%, just like what banks offer in the market.

M-Shwari however takes the savings concept further, with the idea of a Lock Savings Account. This works a little like a fixed deposit account, where you keep depositing money for a fixed term, and you can only access it after that defined term has passed.

Why M-Shwari is great for the #52WeekChallenge

We are using M-Shwari for the Challenge for a number of reasons:

  • Since we are saving from our spending and not our regular saving, adopting a convenient method to set aside these small amounts is key. With regular saving, you need to plan to go to the bank to do a deposit, or to log into your account to transfer. This creates a barrier to frequent saving, because the effort you would expend to transfer 50 bob to a different account is just not worth it. As a result, you end up postponing the saving, until the amounts due are so huge, that you have to dip into your regular savings. We want to avoid this by making it as convenient as possible.
  • It is safer than a physical piggy bank. If you do not live alone, your people could be tempted to dip into your piggy bank. I explained my dislike for piggy banks in this post. In addition to the safety issue, money saved in a piggy bank does not earn any interest. Then once you break your piggy bank, you still have to take the cash to the bank, which means there is the risk of spending it.
  • A Lock Saving Account acts as a deterrent from spending the money you have saved. Though M-Shwari allows you to withdraw money from your Lock Account before the lock period is over at no cost, you need to make an application and then wait for 48 hours before your money is credited to the M-Shwari account. This protects your money from impulse spending.

Download the #52WeekChallenge chart.

Remember to tweet me a photo of your chart or M-Shwari text every Sunday. This is how we stay accountable!

If you are reading this on the first week of March, we are on week 9, with total savings of Kshs 2,250. You can pick up from Week 9, and then try to catch up on the earlier weeks with time. Do not forget to set a goal – what will Kshs 68,900 do for you on December 31? This can be a fun goal or even a dead-serious one.  Read about my goal here.

  1. Morrine March 4, 2017 at 12:37 pm

    Hey,Can I start now.?Please help

  2. Morrine March 4, 2017 at 12:46 pm

    I don’t have Twitter.Can I still do it?

Comments are closed.

About the Author

When I’m not here writing, I run Lattice Training, where we offer customized training solutions for businesses of all sizes, from startup entrepreneurs all the way to large corporations.
The aim of this blog is to simplify personal finance. I write about budgeting, personal finance, management and doing business in Kenya, in a way that everyone will understand.

If you have questions or would like to get in touch with me, leave your details on the form below, and I will get in touch. Thanks for reading.

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