Mobile money transaction in Tanzania hits Sh8 trillion mark

Dar es Salaam. Mobile phone subscribers in Tanzania transacted a whopping Sh8.32 trillion on the digital platform in June alone, reinforcing the growing command of mobile money in financial inclusion of the unbanked population.

Latest figures by Tanzania Communications Regulatory Authority (TCRA) show that the figure transacted for the month was a Sh873.84 billion more than the Sh7.4 trillion transacted in May, 2019. The amount transacted in April was Sh7.67 trillion.

The huge transaction is a boon to telecommunication companies that mint millions of shillings in user-fees and also to banks that have drastically reduced their operational costs as more and more clients move to Sim banking. The government too earns billions of shillings in taxes from the transacted value in excise duty.

This fit possibly explains why telecommunication companies recently teamed up with TCRA to carry out public sensitisation on mandatory biometric Sim card registration, amid fears that the slow progress in the registration could negatively impact the industry.

There were a total of 43,749,086 operational Sim cards in Tanzania in June 2019, according to the TCRA figures while the number of mobile money accounts rose from 22,756,359 in April to 22,957,515 in June.

A 2017 Fincope study on demand for, access to and usage of financial services throughout Mainland Tanzania and Zanzibar, indicated that the population of adult Tanzanians who made use of financial services increased from 58 per cent in 2013 to 65 per cent in 2017. The rise was primarily on uptake of mobile phones.

Though the sector lost a total of 125,247 Sim cards between April and June 2019, the number of mobile money accounts rose by 201,156 to reach 22.956 million between April and June.

The telecommunication companies have said sustainability of the gains on mobile banking depend primarily on what happens with the speed of issuing Tanzanians with national IDs to be able to complete the biometric registration of their lines as the December 2019 deadline looms.

In May this year, the government announced new registration rules for Sim card, saying the national ID will be the only legal document for registration of Sim cards.

Vodacom Tanzania managing director Hisham Hendi told Bloomberg News recently that a directive for the registration of all Sim card owners before the end of the year could affect its operations negatively. The company’s board chairman, Mr Ali Mufuruki, last week appealed to the government to address the challenge in issuance of IDs for the uptake of the exercise. He told Vodacom’s AGM that he was worried most subscribers may not beat the December 31 deadline.

TCRA has told operators it will not extend the deadline even as data show that it was only 12 per cent of all subscribers that have so far been registered.

Vodacom said it had listed only 2 million of its 14.3 million users.

“This directive has significant implications for costs and could potentially lower our customer base growth next year,” Mr Hendi said in an emailed statement. “It’s a big challenge for us.” But the National Identification Authority (Nida) remains optimistic.

Nida head of information Thomas William told The Citizen yesterday that the agency has so far registered at least 15 million people who would be able to access any national requirement through either an ID card or its (the ID’s) allotment number.

“At the moment while the exercise is ongoing it’s not necessary to have an ID card. Even the allotment number will suffice,” he stressed.

Vodacom’s M-Pesa remained the market leader in terms of number of accounts and the amount transacted.

A total of Sh4.88 trillion was transacted via M-Pesa in June, representing 58.7 per cent.

In second slot was Tigo Pesa. It held a 24.3 per cent market share. A total of Sh2.02 trillion was transacted via the platform.

On second slot was Airtel Money. It transacted Sh1.22 trillion, accounting for 14.7 per cent of the market share.