The use of mobile phone money services has proved to be efficient means in speeding up financial inclusion, a senior official with the Bank of Tanzania (BoT) has said.
BoT Senior Legal Counsel Mr George Ben Sije said in an interview in Bagamoyo last week that the partnership between financial institutions and telecom companies has bolstered significantly the efforts to reach the under banked population in the country.
“The partnership between commercial banks and telecom firms is enhancing efforts to bring more people to the formal financial system,” he said while dismissing the possibility of conflict between banks and telecom firms as it happened in Kenya between Safaricom and Equity bank over thin-SIM technology.
The contention arose when the Equity bank announced it would roll out thin SIM cards which will be stuck on ordinary SIM cards to fit in the same slot. But Safaricom argued that the thin SIM can intercept data on transmission and will act as an unauthorised third party between it and subscribers.
According to Mr Sije, the situation is different in Tanzania because there is no right of exclusivity as that granted to Safaricom in Kenya to provide mobile money services.
In Tanzania all players, the banks and telecom firms could offer financial services provided all procedures are in place. In fact, he added, the partnership of the two sectors, financial and telecom is contributing immensely towards promoting financial inclusion.
The recent launch of M-Pawa avails banking services to small savers and borrowers through the mobile phone, hugely increasing the potential of expanding the reach of banking services to the previously under-banked.
The mobile phone services have also enhanced the use of financial services such as remittances to 33.1 per cent of adults, savings to 25.6 per cent of adults and payments of bills, fees and business transactions to 9.9 per cent of adults.
Further, agent banking business continues to grow, currently five banks offer their services through this channel with number of agents more than doubling to 840 in April 2014 from 304 in September 2013 when it was launched.
According to the 2013 FinScope survey, 49.9 per cent of adults used mobile money up from only one per cent in 2009.