Mazima Retirement Plan was in 2016 granted an operating licence by the industry regulator, Uganda Retirement Benefits Regulatory Authority (URBRA). The company’s CEO Livingstone Mukasa spoke to the Independent’s Isaac Khisa about the progress registered in promoting voluntary retirement plans targeting informal sector and the opportunities that lies ahead.
Two years ago, Mazima Retirement Plan was granted licence to start operation. How is the market responding to the saving services?
So far, the uptake for our services is positive. We have more than 800 members, with about Shs1bn as contribution. This is because people bought the idea and money started coming in. We also worked with big organizations such as MTN, Airtel, and the Pride Microfinance.
What is the composition of your clients?
Most of our customers are those between 30-40 years and split equally between male and female. Female customers, however, are the constant contributors. Generally, our customers range from boda boda’s to doctors. Mazima is where one can find the rich and the poor, the educated and the illiterate and we are proud for that as a team.
How are you investing shareholders contribution to yields returns?
We have a framework on how to invest the funds. We have a fund manager and the custodian in the name of Britam Insurance and Housing Finance Bank, respectively. One of the most important thing that our shareholders and the prospective shareholders need to know is that the customer’s contribution is secure. We may not guarantee shareholder return on their contributions but we guarantee him or her the principal.
But some savers may only be interested in getting returns out of their money?
Off course, we pay interests on the members contribution irrespective of the amount saved. Last year, for instance, we paid up 8.6% net interest on the member’s contributions.
How do you look at the level of long term savings in Uganda?
Though the situation is improving, I still feel more than 40% of our savings are kept under mattresses. We are seeing many people interested in signing up for saving schemes. We are soon going to see saving culture picking up. However, there’s need to understand that the poor save differently from the rich. The poor save for emergence but the rich save for investment.
How long can one save to be allowed to access their savings?
For one to access his or her saving, the customer should have saved for at least a year. Mazima’s account is not a commercial bank but an individual retirement’s benefits account.
How are you mobilsing the population to register for mazima retirements scheme?
That is our biggest assignment on the market. Our biggest cost is how to advise more people to sign-up for the scheme. There’s therefore need to tap into groups as well as strong referrals.
How can one sign-up with Mazima retirement plan?
We have made it simple. Once an individual signs up with us and agree with the set terms and conditions, we have signed an agreement with MTN which sends us customer’s data. This helps us in completing the registration process. The other way is signing up through our Google app or visiting our offices and filling in paper documents.
What is Mazima’s geographical coverage at the moment?
We serve all people countrywide. However, we are still struggling with two things – first, people wanting us to have physical offices and secondly, we are running a digital service available anywhere. Our feeling is that going physical will increase capital requirement yet we need to grow customer’s contribution and be in position to pay dividend.
What is your comment on the earlier proposal to have the pension sector liberalized?
I am a pro-liberalisation. The points raised by those opposing liberalisation stems from the fear that people will run away with the contributor’s money. If you look closely with the law as it is now, actually that is already closed out. For the past few years Mazima has been in this market, I can say that we have made the pension sector better. More and more people are now getting interest in saving for their future.
Where do you see Mazima retirement plan in the next five years?
We came to solve a problem. We hope to double the number of contributors to about 3,600s members by next year. We are also becoming more innovating. We have a health insurance cover for our contributors worth Shs 150,000 per individual per annum. We are also developing more products such as enabling contributors have access to cheap housing as well as higher education financing. We would like to see our contributors living in decent homes as well as ensuring that their children are educated. Entering at least three newer markets is also among our priority.