DAR ECONOMY ‘STABLE’ AS FINANCIAL INCLUSION HITS 60PC

Bank of Tanzania (BoT) Governor Prof. Benno Ndulu

MOBILE phone money services have heightened financial inclusion during the past decade from just 11 per cent to over 60 per cent of the population as of now, a new report by the World Bank has revealed.

The 9th Tanzania Economic Update titled; “Money within reach; Extending Financial Inclusion in Tanzania,” indicates further that despite the fragile global economy, the Tanzanian economy has maintained a relatively high level of stability.

According to the outlook, in less than eight years, efficient and low-cost mobile money transfer services have significantly uplifted financial inclusion in Tanzania. “More than 60 per cent of the population now has a financial account compared to 11 per cent in 2006, with most of these accounts held through mobile money services,” the dossier read in part.

Speaking at the launch of the report, the Bank of Tanzania (BoT) Governor, Prof Benno Ndulu, was impressed that people can even borrow money from mobile phone services to run small-scale businesses.

“For instance, a food vendor can access loan from her/ his mobile phone operator in the morning, do business in the afternoon and repay the money in the evening,” he stated. The World Bank Country Director for Tanzania, Malawi, Burundi and Somalia, Ms Bella Bird, pointed to the fact that the mobile money revolution has made tremendous impact on the lives of people.

“However, more efforts are required to expand financial access particularly to women and youth in rural areas,” she urged.

Ms Bird as well recommended that there should be complete rollout of the National Identification System and shift towards electronic payments in public service.

The Managing Director of the National Microfinance Bank (NMB), Ms Ineke Bussemaker, said the bank was in discussions with the Tanzania Social Action Fund (TASAF) to make electronic payments to beneficiaries of social protection and conditional cash transfers. Even with success in financial inclusion, the dossier indicated that access to credit has remained a challenge, particularly for small and medium enterprises.

It pointed further that the larger financial system, which is crucial for the business sector, is lagging behind in terms of its ability to mobilise savings and provide access to affordable credit facilities to the economy.

Source: DailyNews