Choosing a Financial Partner for Bayelsa CDA STARS

The recently named Bayelsa CDA STARS Program (Bayelsa Child Development Accounts: Savings, Training And Rewarding Savers) requires a strong and active financial institution to implement the program.  This is because the participant accounts are complicated.

Account Structure:

• Two related but separate accounts exist for each child.
• The first account (let’s call it account A) is the savings account into which a child and his/her parents, relatives, etc. deposit money
• The second account (account B) holds the government’s initial deposit, match and any other potential bonus deposit.
• Each child (with his or her parent as a cosigner) will have access to his or her own money in his/her personal account (account A) in line with the partner financial institution’s rules for personal savings accounts. Access to account A will be “open” in this sense so that the child or guardian can make a withdrawal in case of an emergency.
• The matching funds provided by the government will be kept in a separate account (account B) from a participant’s own savings and will not be accessible to the participant until the child is ready to use it for its intended purpose.
• Participants will receive a statement from the bank each quarter that indicates how much money they have saved, their associated match and their total savings (individual savings plus the match, including any accrued interest).

As you can see, there are two accounts per student, with rules and requirements.  On top of that, the financial partner has to go to the students’ schools to collect their deposits—because we can’t have students who are trying to save money traveling long distances and putting themselves at risk.  Also, since most of these communities are unbanked, the bank needs to really engage with the communities, the students, their parents and make sure no one is confused or intimidated by them.

So how did we find a partner?

With the help of the Ministry of Finance, the program management team invited all the banks with branches in Bayelsa to a meeting.  At that meeting we presented to the 13 banks that attended, answered their questions and gave them a Request for Proposal (RFP).  The RFP detailed our needs and asked the banks to submit a detailed proposal.

Out of the 13 banks, 2 submitted good proposals within the deadline:  ETB Bank and WEMA Bank.  However, WEMA Bank was more active in trying to work with us—submitting extra information about their child savings programs, calling and visiting us regularly during the decision making process, and it was clear that they were going to be able to go the extra mile that we would require.

We decided on WEMA Bank:

WEMA Bank has already proven to be an able and accessible partner.  Their Yenagoa Branch Manager was very helpful at our meeting with the principals of the recently selected schools (a post detailing this will be put up soon).   They contact us regularly to inform us about what is going on with our operational account.  We have submitted a Memorandum of Understanding to the Ministry of Justice, outlining our legal relationship and expectations.

Recognizing the challenge of managing 1000 accounts in 24 different locations, we are also working with the principals to identify which communities have bank branches near them and WEMA will manage splitting the accounts with that branch.   This will hopefully facilitate access to deposit services for all of the STARS.

Overall, we are satisfied with them as a reliable financial partner—a critical piece of our program’s success.