The 65.3 per cent financial inclusion among adults’ rise is below the targeted 70 per cent
FORMAL financial inclusion among adult Tanzanians has continued to register an upward trend during the last eight years from 15.8 per cent in 2009 to 65.3 per cent, this year, according to the latest findings of the FinScope Tanzania Survey 2017.
The growth is however below the National Financial Inclusion Framework which had set a target of 70 per cent of the adult population by this year. During the previous FinScope Tanzania survey in 2013, the inclusion stood at 58 per cent.
Launched in Dar es Salaam yesterday, the latest survey showed that mobile financial services continued to make a higher contribution in financial inclusion at 60 per cent, compared to other channels. Mobile money services grew from 50 per cent in 2013 to 60 per cent, this year.
There was a modest growth in the banking services from 14 to 17 per cent while insurance services uptake grew to 15 from 13 per cent, with reliance on informal channels being reduced significantly.
About 10,000 respondents took part in the study. FinScope survey measures demand, access and usage of financial services throughout Tanzania Mainland and Zanzibar. In the latest study, respondents were drawn from Iringa, Singida, Mtwara, Rukwa, Mwanza and Zanzibar.
Conducted between April and July, this year, the FinScope Tanzania Survey 2017 is the fourth in a series after previous studies in 2006, 2009 and 2013. The report indicated that 63 per cent of adult Tanzanians owned a mobile phone and 80 per cent lived in a household with a mobile phone.
The latest study covered access and demand for mobile money services, bank accounts, insurance services, pension funds and Savings and Credit Co-operatives Societies (SACCOS).
Presenting findings of the study, the Executive Director of Financial Sector Deepening Trust (FSDT), Mr Sosthenes Kewe, pointed out that adaption of mobile phones within households, at 86 per cent of the population, allowed people to access mobile financial services more conveniently.
“These developments provide an opportunity for Tanzania to leverage technology in driving usage and reducing the costs of transactions,” the FSDT boss explained. The study also showed that proximity to where financial services were offered had improved, with the adult population living within five kilometres of an access point reaching over 78 per cent.
However, despite the increase in access to financial services, the financial behaviour among adult Tanzanians indicated that 50 per cent of them did not know how much they spent in the previous week.
It showed further that 43 per cent of Tanzanians made savings during the past 12 months while a quarter of the sampled respondents aged 55 years and below had no retirement plans.
On the other hand, 56 per cent of Tanzanians cut down expenses when they were about to run broke. The good news is that 83 per cent of Tanzanians have basic identification (voter registration) while only three per cent had title deeds for their land.
“The future therefore is placed on the National Identification System to deliver the most modern, reliable, secure and verifiable ID system to drive multiple use cases for financial sector development and the economy in general,” Mr Kewe said when presenting the findings.
The survey indicates that digital credit through M-Pawa (Vodacom), Timiza (Airtel) and Tigo Nivushe (Tigo) had reduced the number of people keeping their money at home.
Commenting on the survey, the Governor of the Bank of Tanzania, Prof Benno Ndulu, said that financial service providers should come up with innovative strategies which were appropriate and convenient to financially underserved population.
“Financial service providers can innovate a full package of products and financial literacy that can easily be adopted by the financially underserved population,” he noted, adding that financial literacy was extremely important in driving up financial inclusion in the society.
Prof Ndulu said having better statistics showing increased financial inclusion in the country was insufficient without showing its impact in the population, particularly contributions to the poverty alleviation.
He challenged the FSDT to include in the next study the impact of the increased financial inclusion in the country. It is against this backdrop that all stakeholders involved in the provision of financial services collaborated in designing innovative and friendly products which were appropriate to the financially excluded group.
The FSDT Executive Director, Mr Sostenes Kewe, said majority of the population excluded in the financial services were farmers who constituted over 70 per cent of the population. “There is need to conduct research on suitable goods suitable for these people so that they can have access and use the financial services as aiding tool in the fight against poverty,” he said.
The TPB Bank Managing Director, Mr Sabasaba Moshingi, said the banking contribution to the financial inclusion was still minimal, calling for the stakeholders in the banking sector to invest in innovation in order to reach more people.
The president of Village Community Bank (VICOBA), Ms Devota Likokola, called for the need to enhance financial literacy from the family level, an important strategy to reach more people.