How mobile money agents transform financial access
What you need to know:
- Mushrooming of mobile money shops across the country has helped in money circulation, especially in the rural areas where banks hardly have branches.
Dar es Salaam. Mobile money agents have created channels for the government to succeed in provision of financial services to all levels of society.
Mushrooming of mobile money shops across the country has helped in money circulation, especially in the rural areas where banks hardly have branches.
According to a report supported by the Bank of Tanzania, ministry of Finance and Planning, National Bureau of Statistics, Office of Chief Government Statistician-Zanzibar, about 78 per cent of adult Tanzanians in rural areas live within a five-kilometre radius of a formal financial access point, majority of which are mobile money agents.
The Finscope 2017 report argues that the financial sector in Tanzania is deepening rather than widening, and mentions Katavi, Rukwa, Lindi, Simiyu, Tabora, Singida and Manyara - among others - which have a smaller percentage of people living within 5km of a formal financial access point.
The survey cites Kigoma, Geita, Dodoma, Njombe, Kilimanjaro, Mbeya and Tanga as areas with a relatively higher percentage of people living within 5km of a formal financial access point. Most of these are mobile money agents rather than actual bank branches. The report, which revealed that the 78 per cent constituted a 12 per cent increase from last year, mostly attributed two thirds of financial access to mobile money agents who also provide services as bank agents.
“The majority of financial service providers within a 5km radius were mobile money agents; and 55 per cent of mobile money agents provide services for multiple providers,” the statement reads. The statement noted that, “two thirds of the mapped bank agents are also mobile money agents, which is another indication that the financial sector is deepening rather than widening.”
Late last year Bank of Tanzania told The East African newspaper that the use of banks remained stable on year-on-year data, but was low compared with mobile money.
It added that most bank and non-bank financial institutions (NBFI) users also relied on mobile money, adding that many people used mobile money accounts more actively than banks and NBFIs.
BoT said the banks had taken the opportunity to reach the unbanked rural masses through mobile money agents.
