Financial illiteracy holds back Zanzibaris: survey

Monday August 27 2018

The Financial Sector Deepening Trust (FSDT)

The Financial Sector Deepening Trust (FSDT) executive director, Mr Sosthenes Kewe. 

By Syriacus Buguzi @buguzi

Dar es Salaam. Illiteracy continues to be one of the main barriers to usage of financial services among the people of Zanzibar, says a newly released 2017 FinScope Survey on Zanzibar.

The survey, which was launched in Zanzibar last Tuesday provides an up-to-date comprehensive understanding of the financial landscape and in-depth insights into who is being served by the financial sector.

Researchers have proposed that knowledge gaps in financial matters must be filled in order to boost financial services uptake for those who have been left behind in the Isles. “Concerted efforts are still needed to address this challenge especially among the younger generation and people living in rural areas,” suggests the survey. The survey points out a case scenario of Saccos which failed to expand services after taking bank loans.

The Financial Sector Deepening Trust (FSDT) executive director, Mr Sosthenes Kewe, said the data from FinScope Survey, for the first time has gone further to the regional levels and covers specific financial usage data in those regions. According to the principal bank officer of the Bank of Tanzania (BoT), Ms Nangi Massawe, women, youth and small business enterprises winners were still lagging behind in the uptake of financial services in the National Financial Inclusion framework. When presenting the findings recently, the FSDT Head of Research, Mr Elvis Mushi, revealed that the women, youth between ages of 16 and 25, farmers and fishermen are groups that still lag behind as financial services are concerned.

“There are also high levels of dependency among adults aged 65 years and above where about 55 per cent of them depend on others to pay for their expenses,” he noted

The FinScope survey shows a significant part of the Zanzibaris expenditure is on construction and investments.


The religion factor

Mr Rashid Khamis from the Zanzibar Insurance Corporation pointed out that religious beliefs are partly the reason many people have now joined the Islamic People’s Bank of Zanzibar.

The ministry of Finance and Planning is planning to come up with strategies and policy frameworks that could address that gap, he said.

In some cases, Khamis Chibu said the ministry of Planning and Finance, PBZ and Zantel had partnered to ensure that government transactions were made through eazypesa.

However, he says, some people were still afraid of using digital platforms for payments. For his part, the director of policy at the Zanzibar’s ministry of Finance and Planning, Mr Iddi Haji Makame, said there should be zero distance between the wallet and the bank so that the Zanzibaris are not left behind in financial services.