57pc access financial services: report

 Bank of Tanzania (BoT) .PHOTO|FILE 

By Ludger Kasumuni ,The Citizen Reporter

In Summary

“This calls for review of the target within the country’s financial system, because there is high rate of financial inclusion triggered by the rapid growth of mobile financial services,” he said.

Dar es Salaam. The number of Tanzanians making use of financial services reached 57.4 per cent of the adult population in 2013. This growth, a Finscope Survey shows, was pushed substantially by the expansion of mobile phone cash technology. This figure surpasses the government target of enabling at least 50 per cent of the country’s adult population to have a cut in financial services as of 2016.

The Finscope Survey 2013 shows that 13.9 per cent of the number comprises bank customers, while 43.5 per cent use non-bank formal services that include mobile phone money facilities.

Some 15.8 per cent use informal mechanisms only while 26.8 per cent is excluded.

In 2009, when the Financial Sector Deepening Trust (FSDT) carried out the second Finscope Survey the number of adult Tanzanians accessing both bank and non-bank formal financial products was 15.8 per cent but the number has now jumped to 57.4 per cent in a span of four years, according to Bank of Tanzania (BoT) Governor Prof Benno Ndulu.

The BoT chief said that while the central bank had in 2011 set the target for financial inclusion at 50 per cent of adult population in 2016, the latest Finscope Survey shows a much higher level of financial inclusion.

“This calls for review of the target within the country’s financial system, because there is high rate of financial inclusion triggered by the rapid growth of mobile financial services,” he said.

“Over half of all adult Tanzanians – 12 million people – now use their mobile phones to remit, receive and save money, or to pay bills. Men and women in both urban and rural areas throughout the country have immediate access to a range of financial services at the click of a few buttons.”

The BoT governor further said that in the past, the banks believed there was an unfair competition in the financial market because of the entry of mobile phone financial service dealers, but the banking institutions are now recognising the need to integrate those services for expanding their own markets.

According to him, the Finscope Survey 2013 reveals that there are still 17 million adult Tanzanians who are excluded from banking services due to inability of commercial banks to reach them.

“I therefore challenge all financial institutions, especially the banks, to use mobile phone money market to create new products and expand their services to rural populations,” he said.

He was optimistic that within the next two to three years, the banks could triple the number of their clients by forging links with the mobile phone financial services.

The FSDT technical director, Mr Sosthenes Kewe, supported that there is a big increase in the use of non-bank formal products, with a growth of 9 to 14 per cent between 2009 and 2013.