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Friday 5 June 2015

TANZANIA SURPASSES FINANCIAL INCLUSION TARGET

Tanzania has surpassed its financial inclusion target of 50 per cent, some two years ahead of deadline in 2016, thanks to the mobile transaction platform.

The Bank of Tanzania (BoT) is now working on a new goal after the country registered a financial inclusion of 55 per cent in 2014 well ahead of the Maya (Mexico) declaration of attaining 50 per cent by 2015.

BoT Deputy Governor, Mr Juma Reli, said the central bank set a target of 50 per cent inclusion some four years ago but mobile transactions enabled them to surpass the target well ahead of time.

“We didn’t underestimate our target, the mobile phone transactions surprised us,” Mr Reli told the ‘Daily News’ on the sidelines of the 21st World Savings and Retail banking Institute Africa region meeting.

The BoT singled out mobile phones as “one of the most critical links for this phenomenal success” between the unbanked population and financial services.

The deputy governor said that FinScope 2009 survey showed that 55 per cent of the bankable population was locked out of the financial services, but in 2013 the figure dropped to 26 per cent.

“We are working on the new target as the current one has been surpassed well ahead of the deadline - but I cannot tell you the figure right now until we finalise the matter,” Mr Reli said.

The financial enables assists banks to reach many customers and mobilise more deposits, which are crucial variables for spurring investments through commercial loans.

Under the terms of the Maya (Mexico) Declaration, the BoT committed to increase the share of the population with access to financial services from 27 per cent in 2009 to 50 per cent by 2015, now hoping to achieve 75 per cent within the next six years.

However, Mr Reli brushed aside mobile phone banking as cash-in-cash out platform, saying there are micro loans which are now issued using the handset.

World Savings and Retails Banking Institute Managing Director, who was in Dar es Salaam, said it is necessary to use mobile phones payment system, but at the end of the day these transactions are passing through banks.

“In Scandinavia only 5 per cent of payment are done using cash, which is vice-versa in Africa - once it reaches that level the inclusion will increase as well,” Mr De Noose said.

Apart from mobile banking, bank agents have increased their penetration led by CRDB that have over 1,000 agents, followed by Tanzania Postal Bank (TPB) over 300, DCB Bank 130 plus and NMB targeting 250 in 2015.

The early challenges was accepting and blending mobile financial infrastructure with main stream banks as a way of growing banking services in a cost-effective manner.

Dhow Financials CEO, Prof Mohamed Warsame, said financial inclusion does not translate to have a bank account, but rather a part of the banking system even through mobile phone accounts.

Daily News

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