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Extending pension and savings scheme coverage to the informal sector: Kenya's Mbao Pension Plan


Addresses for correspondence: Rose Musonye Kwena, Manager, Corporate Communications, Retirement Benefits Authority, Rahimtulla House, Upper Hill Road, off Ngong Road, P.O. Box 57733-00200, Nairobi, Kenya; Email: John A. Turner, Pension Policy Center, 3713 Chesapeake St. NW, Washington DC 20016, United States; Email:


The Mbao Pension Plan is a voluntary individual account savings plan to which all workers in Kenya may contribute without regard to income or age. It is designed to provide a programme that is suitable for the unique nature of the informal sector and to encourage a savings culture for those workers. The key innovation is that low-income workers can easily make small contributions at relatively low cost, considering the small contributions and small account balances. Participants can conveniently make contributions anytime and anywhere using their cell phones. This savings innovation is made possible by technological innovations that have reduced the costs of cell phones and airtime, and by the entrepreneurial innovation of mobile money. The plan is provided through private-sector businesses.