TANZANIA TIMES
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Why Most Tanzanians Bank from the Palms of their Hands

“Smiling all the way to the bank,” does not apply to Tanzania, where majority of its people steer away from the financial institutions’ buildings

The Central Bank of Tanzania (BOT)

Going to the Bank? What is that?

With over 40 percent of the country’s population transacting digitally, Tanzania is cited to be among the world’s leaders in mobile cash transfers.

Data from the International Statics compilation entity, Statista indicate that by June 2019, the country’s mobile money transactions had reached the value of USD 3.6 billion.

That was garnered from more than 23 million mobile money subscriptions.

Measured against the total population of approximately 56 million, it is explained that over 40 percent of Tanzanians made use of mobile money technology in 2019.

Only a small minority of Tanzanians, in fact less than 15 percent of the country population, access to traditional banking services.

While at first they were being shunned upon, soon mobile money dealings clouded off the traditional banking systems in terms of reach, users and transactions.

The Central Bank of Tanzania reported 22.4 million active customers in 2019, a remarkable increase in less than a decade, compared to 1 million customers listed in 2010).

As of this year 2022 the number according to Tanzania Communications Regulatory Authority (TCRA) has reached 32 Million.

Even mainstream banks now are going mobile, many have synced their services through mobile applications in order to also cash from the digital development.

Mobile money users in Tanzania record around 257 million transactions in a month, according to data from Statista.

With the almost universal availability of mobile phones and the high mobile voice penetration rate in Tanzania consumers have easy access to financial services and financial inclusion.

Mobile money services like M-Pesa, Tigo Pesa, Airtel Money and Halopesa are used to pay bills, make private transfers, and conduct business transactions.

These mobile wallets are operated via mobile phone and powered by SIM cards from large operators. As transactions are concluded via text message, no internet connection is needed.

Turning from physical banks to digital banking, it has been realized that mobile phone ownership was much higher than traditional finance use in Africa.

Mobile phone ownership has so far reached over 52 Percent in Tanzania.

Personal handsets and mobile money agents are more spread out into rural areas than traditional bank buildings.

Mobile money platforms have filled the vacuum of the unbanked population.

But banks have also taken note, many have even moved to act, recruiting agents other than establishing physical branches.

Agent banking which has boomed recently with 10,070 agents as of 2017 a sharp increase from 5,676 agents reported in the previous year 2016.

Thanks to mobile payment services that has helped to reduce financial exclusion to just 28 percent compared to 56 percent in 2009, the gap has been closed by 50 percent.

Experts say, mobile phones are much less unequal than traditional finance.

That is why many have hoped that delivering financial services through mobile phones remains the best option in eliminating inequality in access to finance.

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