PRIME Minister Kassim Majaliwa has launched the Second National Financial Inclusion Framework (2018-22) with a strong call to shift the emphasis to usage of financial products and services in order to propel an industrial economy.
He said the new framework should focus
on the impact of using various financial products and services without
losing sight of access in order to raise the standard of living towards
realizing the envisaged middle income economy goal by 2025.
“I call upon public and private
stakeholders to work closely in implementing the five-year National
Financial Inclusion Framework to ensure it is accomplished before the
set deadline,” he said. The new framework targets to raise formal
financial inclusion to 75 per cent from 65 per cent in 2017, closeness
to a financial service point to 90 per cent from 86 per cent and
insurance services delivery to 50 per cent from the current 15 per cent.
Alongside this, the PM stressed on
proper diagnosis of the barriers on the first framework (2013-16), with
strong focus on the access of financial services. Some of the barriers
were related to identification, illiteracy, inconvenience and
inappropriate products.
He pledged government support in putting
in place, a conducive infrastructure as well as an enabling legal and
regulatory framework to simplify both access and usage of financial
products and services, particularly to the underserved rural population.
“It is proper that the new framework
focuses on women and the youth -- groups whose access and use of
financial products and services are considered to be still very low,” he
said. The new framework ensures that all people have National
Identification cards before 2022 as well as introducing financial
literacy studies from the primary school level, towards promoting
awareness on financial matters from early stages.
Similarly, the premier called for use of
all media outlets, particularly community radio stations in rural
areas, to enhance financial literacy on the use of financial products
and services. “Special emphasis should be placed on promoting a saving
culture among the people as an important source of investment and which
could benefit financial institutions,”the PM said.
Earlier, the outgoing Bank of Tanzania
(BoT) Governor, Prof Benno Ndulu, pointed out that a conducive
infrastructure was critical to facilitating access to financial services
through closing the information asymmetry gap by using unique and
verifiable identification, credit reference system and collateral
registry. He further explained that there was a need for effective and
efficient payment ecosystems by improving digital payment platforms and
enabling full inter- operability among service providers.
“Despite some challenges, the first
framework registered outstanding results that put the country in the
global records,” he said, adding that Tanzania was, for three
consecutive years, the first in Africa and 6th in the world, with
significant growth in financial inclusion.
In a short period, the level of usage of
informal financial services narrowed to seven per cent from 29 per cent
while the percentage of adult population using formal financial
services quadrupled due to rapid adoption and usage of electronic
platforms like mobile money services and flexible regulatory
environment.
Despite the achievements, the level of
financial exclusion was still high at 28 per cent with majority of the
excluded living in rural areas, including smallholder farmers, youth and
women
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