Tanzania lags behind in adult financial inclusion

By The guardian reporter

The government and private sector have been urged to make sure that the number of adults who access formal financial services is increased in order to speed up economic development.

 

Speaking to this paper in an interview on Tuesday, a financial analyst, Hezron Mkanga, said at the moment only 17 percent of adults have access to financial services which is not healthy for economic growth.

 

"I urge the private sector and the government to devise means that would see the percentage go up," he said.

 

He noted that Tanzania is one of the African countries with the lowest number of adults who have access to financial services.

 

However, Mkanga said Tanzania acknowledges financial inclusion, which formally encompasses all sections of the citizenry, as one of the key drivers of economic growth leading to reduced economic vulnerability for individuals and households, poverty alleviation, and improved quality of life for all people.

 

Recently, the government through National Council for Financial Inclusion announced plan to increase the percentage of adults who access financial services to 50 percent in the year 2016.

 

The council chairman, Prof Benno Ndullu, was quoted as saying the 50 percent target is in line with the international commitment that the Bank of Tanzania, on behalf of financial sector stakeholders, made in Riviera Maya, Mexico in 2011 under Alliance for Financial Inclusion Global Initiative known as "the Maya Declaration."

 

The Framework has been developed through a comprehensive stakeholders’ consultative process. It involved in-depth reviews of financial inclusion related studies in Tanzania and other developing countries. 

 

It also involved synthesis of national policies that are in line with the identification of fundamental barriers for financial inclusion and strategic solutions to enable widespread availability and usage of basic financial services. 

 

Such services include savings, credit, payments, insurance, and more advanced financial services such as pensions, securities and government transfers through formal mechanisms.

 

He said the council will implement a three year financial inclusion frame work from this year to 2016 that would be guided by the shared vision and commitment from all the relevant stakeholders in developing coordinated initiatives between the public and private sectors.

 

"This is an important basis for achieving other important dimensions of financial inclusion such as regular usage of quality services and improved welfare of users,"he said. 

 

 He further said this is a rolling plan that will be reviewed and updated to reflect the vision beyond 2016.

 

The framework aims at addressing the fundamental broad barriers that limit financial inclusion by establishing a broad and robust infrastructure to support growth of appropriate financial services and use of technologically driven delivery channels.

 

The level of financial inclusion in Tanzania is still low despite various initiatives that have been taken by public and private sectors.

 

However, leveraging on mobile telephony technology with 30 million subscribers has significantly enabled nearly 43 percent of the adult population (9.8 million) to have active mobile payment accounts.