Kampala — The Association of Savings Banks of East Africa (ASBEA) last week met in Kampala to discuss ways of promoting savings in Uganda, Kenya and Tanzania with a focus on inculcating the savings culture among children.

On the sidelines of the conference, East African Business Week's Edris Kisambira caught up with Mr. Stephen Mukweli, the managing director Post Bank Uganda who hosted the conference, and below are excerpts.

Can you tell us all about the Association of Savings Banks of East Africa (ASBEA)?

ASBEA was formed in December 2001 by the three savings banks in East Africa (before Rwanda and Burundi became members) including Post Bank Uganda Limited, Tanzania Postal Bank Limited and Kenya Post Office Savings Bank Limited.

The objective was to work together towards achieving a common goal of promoting savings as a primary means of eradicating poverty, strengthening communities, and building viable investments in national economies. The savings banks desire to establish affiliations with each other in order to facilitate the exchange of information, ideas, training, services and technology.

ASBEA was created with distinct economic and social objectives to serve the interests of the diverse saving community in East Africa and also to promote the cultural interest of the three savings banks. The critical pillar for the realisation of these objectives is the on-going creation and development of partnerships with like-minded savings and retail banks in other parts of the world.

What are the issues on the table that you are discussing and what is the key outcome of the meeting going to be?

We are discussing a rage of issues ranging from challenges of savings in East Africa, the success of the children's savings project, focusing on children's savings culture, the role of microfinance in savings and the role of regional payment systems in savings etcetera.

Savings in Uganda and indeed the rest of East Africa do not make sense to many people because of the small interest rates that banks offer savers, what exactly do you think needs to be done to get people to save?

The public needs to be sensitised about the benefits of saving which include securing one's future and also the value of savings to the country's economy.

The theme for the meeting this year is focusing on children's savings culture. What exactly do you plan to do to cultivate and inculcate the culture of savings at an early stage?

At the moment we are partnering with the Private Education Development Network in order to reach out to children of school going age and encourage them to cultivate the culture of savings. We plan to introduce more incentives for savings through competitions to attract customers to the product.

At the moment we are giving out piggy banks to all students and children who open up accounts with us so that they can practice savings at home. These piggy-banks can only be opened at the bank premises and the money deposited on the accounts thereafter.

What is the experience elsewhere where a savings culture has been developed?

The population there has been taught to value savings from an early age and having a savings account is second nature to the person.

What role do the governments of East Africa have to play to get people savings?

Governments have got to increasing capitalisation in the institutions concerned so as to foster outreach to customers by reducing the costs of commuting to financial institutions thereby increase savings. Governments have got to consider offering tax incentives such as tax relief as interest.

As things stand today, which of the five EAC member states has a better savings culture?

Kenya is ahead followed by Tanzania and then Uganda. Rwanda and Burundi follow in that order.

What are the benefits of a savings culture and how would a good savings culture impact East Africa or an economy for that matter?

The benefits of savings include the fact that the customer is assured of a brighter future since he/she can secure his own future by planning for it. It instills the discipline of financial planning ahead of time in the community and also increases the deposit base of the institutions and therefore avails the money for government to borrow for its developmental programmes.

What can you say are the successes of the association since it was formed and what are the challenges that prevent the association from arriving at its goals?

ASBEA has made significant contribution to the development of member banks' human resource capacity through several training and staff exchange programmes. The association has also been key in promoting savings and financial services. We are at advanced stages of developing a cross-border money transfer system that will offer more cost-effective services to customers, compared to alternative money transfer services available in the market.

We are also establishing networks, affiliations, and are promoting partnerships. Through the association, the three savings banks have enhanced co-operation among themselves, and drawn the attention of international development organisations such as the Savings Banks Foundation for International Co-operation (SBFIC), GTZ, and the East African Community (EAC).

Also, through the association, the three savings banks have shared information among themselves more freely, and learnt from each other through seminars and work placements.