Tanzania, Netherlands in bid to boost local financial inclusion efforts

Dar es Salaam. Tanzania will work with the Netherlands in boosting domestic financial inclusion in efforts to meet the government goal of ensuring that every Tanzanian has access to such services within the 15-kilometre radius.

This comes as official figures show that Tanzania has made encouraging strides in its financial inclusion agenda, with Bank of Tanzania (BoT) Governor Florens Luoga revealing yesterday that so far 96 percent of the population have access to formal financial services.

“With high levels of mobile phone ownership, access of formal financial systems has improved from 55 percent in 2009 to 96 percent nationally. Usage of financial services have also risen 12 percent to 65 percent during the same period,” Prof Luoga said yesterday as he welcomed Queen Maxima of the Netherlands.

Queen Maxima is also the UN Secretary General’s Special Advocate for Inclusive Finance for Development (UNSGSA).
Prof Luoga said despite the registered achievements in improvement of access to and usage of formal financial systems, Tanzania still needed more efforts to improve services and its economic potential and awareness to the Tanzanians.

Whilst the usage of financial services through formal providers has grown, there is still a financially excluded proportion of the population.

“Challenges facing groups like that of women, youths and people with disabilities are of huge focus as we are set for the third implementation of our National Financial Inclusion Framework (NFIF),” said Prof Luoga.

Speaking during the event, the Dutch Queen said her country was ready to assist Tanzania on the financial inclusion strategies and consultation with the private sector and stakeholders on issues related to affordability, consumer protection and improving access to the rural areas.

“One of the things that we would like to help is also on consumer protection because as you start digitizing products, you’re going to have other issues, so we need to just build in protection and financial health because that’s the outcome.  You want people to become better,” she said.

In regards to fintech technology the Queen advised that the government, through the BoT, should create an enabling environment for the private sector to thrive so that they can design and innovate new financial technologies that the people truly need.

The minister of State in the President’s Office (Regional Administration and Local Government Authorities), Ms Angela Kairuki stated that there was significant digital divide and mobile phone ownership between men and women, especially on the bottom 40 percent of the population.

Ms Kairuki, who doubles as chairperson of the national advisory and coordinating committee on Generation Equality Forum (GEF), said that challenges associated with gender digital divide were impeding women’s access to formal financial services and the benefits of digital footprint.

“The other challenge is the financial gap to the Women-owned micro, small and medium enterprises due to structural and market barriers which include a lack of collateral, lack of digital footprint that could be used for alternative referencing, inadequate number of women engaged in financial products and services,” she said.