Tanzania reaches out to people without accounts

News 

Monday, December 16, 2013

BY KENAN KALAGHO
EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

 (Vice President Mohamed Ghalib Bilal Photo By Kenan Kalagho)
DAR ES SALAAM -- Tanzania wants to capture the 50% of the population who are unbanked by 2016 after the launch of the National Financial Inclusion Framework.
Tanzania Vice President Dr. Gharib Bilal asked financial institutions to make sure that efforts to improve financial inclusion caters for the needs of small and medium agri-business and Micro-Small and Medium Enterprises (MSMEs).
Dr. Bilal said there was need for financial institutions in the country to ensure the affordability of services to the majority Tanzanians
He said the Financial Inclusion Framework that has been made possible by both the private and public sector including other stakeholders, is an important tool in boosting the economy and benefit the majority of Tanzanians.
He said despite the improvement of the financial sector, Tanzania still ranked low on the list for sub-Sahara Africa, with only 17% of adult population having accounts in formal financial institutions. The regional average was 24% in 2012.
“Efforts to improve financial inclusion should ensure SMEs and smallholder farmers are included and reliably informed,” Dr Bilal said.
 He also highlighted the importance of improving the retail system to make sure that the use of mobile and electronic payment is promoted.
A recent World Bank survey shows that only 10.6% of the MSMEs have access to finance from formal institution where as small and medium agri-businesses have only 32.4% access and the rest access their financial needs from informal means such as moneylenders. Moneylenders usually charge relatively high interests rates.
  He said electronic payment is important for the country, because it would enable to spur financial inclusion in agriculture sector that is an engine in attaining the required economic growth for our country.
He said the country’s many challenges that include enabling both access and delivery of a wide range of financial services to the poor particularly in rural areas, will be able to find response in the framework.
The Vice President also said the country is bound to succeed in financial inclusion especially with mobile technology that so quickly spread throughout the country facilitating transfer of payments across all parts of the country.
Tanzania has seen the improvements in the performance of the financial sector for the past years where a total percentage of adults accessing mobile telephone payment services have increased to 90% by September 2013 from 63% that was observed in September 2012 according to the World Bank survey report of 2012.