Mobile money services help adults to open bank accounts

03Mar 2016
Finnigan wa Simbeye
The Guardian
Mobile money services help adults to open bank accounts
  • Tanzania has made tremendous progress in expanding financial inclusion by expanding account ownership among adults from only 17 per cent in 2011 to 40 per cent in 2014

ALMOST half of the country’s average adults (over 40 per cent) now have bank accounts, compliments to innovations introduced by mobile phone service providers.

Benno Ndulu

Bank of Tanzania Governor, Prof Benno Ndulu (pictured), said recently in Dar es Salaam that significant progress has been made between 2009 and 2013 in getting more adults to open bank accounts.

Prof Ndulu said following the Second Financial Sector Reforms (2006/12), the government set up a target to extend banking services to the majority poor after a 2006/9 FinScope survey revealed that only 17 per cent of adults had a bank account.

“The rural urban disparity was significant: the rural exclusion was 60 per cent of adults compared to 45 per cent in urban areas. Likewise the micro, small and medium enterprises were excluded by 68 per cent,” the central bank chief noted.

He further noted that because of the said disparity, BoT included the financial inclusion strategy in its corporate plans which yielded positive results between 2009 and 2013.

“The results of efforts that began in 2009 as evaluated in 2013 by FinScope Survey shows that we were able to reduce the exclusion rate by a half, that is, 24 per cent of adults were excluded compared with the 56 per cent that was recorded in 2009,” Prof Ndulu noted.

World Bank Country Director, Bella Bird, paid tribute to government efforts to address the problem of financial exclusion of the masses, saying the bank had listed Tanzania as among 25 countries facing the problem.

“The World Bank Group and its partners have committed to the goal of achieving universal financial access by the year 2020.

To meet this goal, the bank group is focusing its efforts on 25 countries which are home to 73 per cent of all financially excluded people worldwide,” Bird told a financial inclusion review meeting held last month in Dar es Salaam.

Ten of the 25 focus countries are in Africa and they include Tanzania, DR Congo, Egypt, Ethiopia, Kenya, Mozambique, Rwanda, South Africa and Zambia.

Bird said Tanzania has made tremendous progress in expanding financial inclusion by expanding account ownership among adults from only 17 per cent in 2011 to 40 per cent in 2014.

“In 2013, the government successfully launched the National Financial Inclusion Strategy, a step that signals resolve, commitment and energy behind the financial inclusion agenda,” the World Bank chief pointed out.

During the daylong meeting, a Global Findex 2014 report which is the world’s most comprehensive database on financial inclusion was unveiled. It provides in-depth data on how individuals save, borrow, make payments, and manage risks in over 140 countries.

According to Findex data, Tanzania has made remarkable progress in expanding financial inclusion. As mentioned earlier, account ownership among adults increased from only 17 per cent in 2011 to 40 per cent in 2014.Most of that growth has come in the form of mobile money accounts, the report stated.

“In Sub-Saharan Africa mobile technology has the potential to vastly expand financial inclusion. 34 per cent of adults now have an account, an increase from 24 per cent in 2011.

12 per cent of adults in the region have a mobile money account compared to just two per cent globally. Kenya leads with mobile money account ownership at 58 per cent while Tanzania and Uganda have rates of about 35 per cent, 13 countries in the region have mobile money account penetration of 10 per cent or more,” the 2015 Global Findex report stated.

In Cote d’Ivoire, Somalia, Tanzania, Uganda, and Zimbabwe, more adults have a mobile money account than an account at a financial institution. In Kenya more than half of adults who pay utility bills use a mobile phone to do so and in Tanzania, almost a quarter of those receiving payments for the sale of agricultural produce do so into a mobile account.

The Global Financial Inclusion Database provides 800 country-level indicators of financial inclusion summarized for all adults and disaggregated by key demographic characteristics-gender, age, education, income, and rural residence.

Covering more than 140 economies, the indcators of financial inclusion measure how people save, borrow, make payments and manage risk.