UNCDF’s MicroLead partner NBS Bank is partnering with CUMO Microfinance Ltd. to provide CUMO borrowers access to formal savings accounts including individual (Pafupi Savings) and group savings accounts. CUMO is one of Malawi’s largest microfinance providers, reaching 70,000 Malawians in rural areas across sixteen districts via existing savings groups.

“NBS Bank is looking for ways to expand its Pafupi Savings offering, and CUMO customers offer the bank an opportunity to link informal savings groups to a formal financial institution through NBS’ Pafupi Savings product,” says Mercus Chigoga, Head of Personal and Business Banking at NBS Bank. “The intention is to use this opportunity to develop an optimal delivery channel that would provide saving groups and individuals easy access to a formal banking institution.” Pafupi Savings is a mobile-enabled savings account that removes the barriers rural women face in accessing formal financial services using agent banking, mobile technology and community-based marketing.

In the Central and Southern regions – where NBS Bank and CUMO Microfinance Limited share the greatest overlap – CUMO reaches over 63,000 clients in over 4,000 groups. NBS Bank and CUMO have signed an agreement that will allow NBS Bank, via its proprietary agent network, Bank Pafupi, to provide individual and group savings accounts to CUMO clients.  Bank Pafupi agents will also be able to receive CUMO members’ loan repayments.

NBS Bank plans to use this partnership, still in its pilot stages, to design and test a delivery model to reach groups with a basket of financial services, including both individual and group savings accounts. This model can then be used to create group linkages with other organizations.

The proposed model benefits everyone. CUMO’s village groups mobilize significant savings and annually distribute the accumulated savings to members. During meetings with CUMO, NBS Bank discovered that CUMO group members have concerns about the security of their payouts and would like access to bank accounts in order to save more securely. This partnership will enable CUMO members to safely manage their savings, and individuals will be able to save their share of the village bank payout.

Also, CUMO, which has no brick and mortar infrastructure, requires its customers to make loan repayments at partner bank branches.  This is costly and time consuming for CUMO clients. By leveraging the Bank Pafupi agent network, the CUMO customers will reduce their travel time and cost and will be able to repay the loans near their homes or their place of business.  CUMO will also be instantly credited the loan installment into their NBS account and will be able to automatically monitor group repayments.