Vodafone has upgraded its M-PESA money transfer technology to provide customers with the ability to link to an interest-bearing savings account and buy insurance via their mobile.

The service, which is operated by Safaricom in Kenya, offers customers the chance to save money using a direct link to Equity Bank. It provides a safe and secure service for many millions of Kenyans who currently do not have access to a bank account, and so are unable to save money in a secure environment.

Launched in 2007, M-PESA has given over 9.5m Kenyans a safe, cheap alternative to carrying cash, and the new service, dubbed M-KESHO, will build on this. Not only will customers be able to transfer cash but they will be able to save it as well, earning interest on any deposit above 1 KSH (Kenyan shilling).

“Basic banking and money transfer services play a key role in building a secure economy” says Cenk Serdar, Vodafone’s director of mobile payment solutions. “We are delighted that M-KESHO will enable more people to save, and as a result, we hope this will have a positive influence on the whole economy.”

M-KESHO is currently available through a limited number of agents in Kenya.  There are plans to roll it out nationally over the next few months.