Financial Crime World

Tanzania’s Financial Services Crisis: Remote Areas Left Behind

Kampala, Tanzania - A recent report has revealed a shocking truth about the state of financial services in Tanzania. Despite being a significant portion of the country’s population, rural towns are being left behind, leaving millions without access to basic financial services.

Poverty and Financial Exclusion

The poverty-stricken communities are struggling to make ends meet, with a staggering 35.7% of the population living below the national basic needs poverty line. The lack of financial inclusion is exacerbating this issue, making it difficult for them to access credit, save money, or manage their finances effectively.

  • Only 6% of households have a bank account
  • A mere 4% participate in informal savings groups
  • The majority of the population remains unbanked

Regulatory Framework and Informal Financial Networks

The lack of regulatory framework for alternative money remittance systems has led to a proliferation of informal financial networks, which are often vulnerable to money laundering and terrorist financing. This includes expedited mail services, bus operators, and cell phone-based transactions.

  • A lack of regulatory framework for alternative money remittance systems
  • Informal financial networks are vulnerable to money laundering and terrorist financing

Foreign Direct Investments (FDIs) and National Identification Cards

The Government’s open-door policy on FDIs has introduced risks that proceeds of crimes or terrorist financing from outside Tanzania may be laundered in the country. Additionally, the lack of National Identification Cards (NICs) is another major challenge.

  • The Government’s open-door policy on FDIs introduces risks of money laundering and terrorist financing
  • The lack of NICs makes it difficult to implement effective KYC and CDD measures

Awareness and Education

The report also highlighted a general lack of knowledge and awareness about money laundering and its effects among the population. Many Tanzanians are unaware of the dangers of money laundering, which has led to a lack of understanding about the importance of combating this crime.

  • A general lack of knowledge and awareness about money laundering
  • Lack of understanding about the importance of combating money laundering

National Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Strategy

In response to these challenges, the Government has developed a National AML/CFT strategy, which sets out key objectives, strategies, and action plans to address these issues.

  • Key objectives: strengthen the regulatory regime, improve communication and information sharing, and enhance public awareness
  • Strategies and action plans to address money laundering and terrorist financing

Implementation Plan

The implementation plan assigns responsibilities and sets indicative timelines for the various actions planned. The development of the national strategy involved wide consultation with stakeholders to ensure that all relevant sectors are covered and taken into account in efforts to prevent and control money laundering and terrorist financing.

  • Assigns responsibilities and indicative timelines for action plans
  • Wide consultation with stakeholders to develop a comprehensive strategy