The ‘agency banking’ revolution: How Dar financiers are leading the way
Remote service points like this one have broadened the reach of Tanzanian banks and will ultimately improve access to financial services. PHOTO | COURTESY OF GAFIS.NET
What you need to know:
BoT analysts say the fact that over 8 banks have now adopted the agency model points to a future where more and more Tanzanians will have better access to basic financial services.
Dar es Salaam. Here's some good news - the number of commercial banks that offer agency banking has increased from two to eight in the past year as Dar financiers seek to broaden their reach.
A principal economist with the Bank of Tanzania (BoT), Mr Alli Liyau, told The Citizen yesterday that the move will go a long way in creating financial inclusion in the country.
“In February last year the BoT issued guidelines for commercial banks to establish banking agents countrywide. Up to the end of last year, only NMB and CRDB had responded.”
“But now there are eight. This is a positive move,” he told The Citizen at the BoT pavilion in the ongoing Dar es Salaam International Trade Fair.
Apart from CRDB and NMB, the other banks include, Equity, DCB, Amana, Tanzania Postal Bank, Finca Tanzania and KCB Tanzania.
These represent just 15 per cent of the 53 registered commercial banks in the country.
According to a 2013 Finscope Survey, the number of Tanzanians making use of financial services reached 57.4 per cent of the adult population until last year.
This growth was, however, pushed substantially by the expansion of mobile phone cash technology and that it was only 13.9 per cent of the population that use commercial banks while 43.5 per cent use non-bank formal services that include mobile phone money facilities.
Some 15.8 per cent use informal mechanisms only while 26.8 per cent of the population is excluded.
For his part, a BoT senior financial analyst, Mr Mohamed Kailwa, said banking agents were helping to offer various banking services that are within the BoT list of payment systems.
However, the agencies are not allowed to carry out transactions in currencies other than the Tanzanian shilling, but all other banking activities can be conducted.
