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Tanzania’s Financial Inclusion Framework: A Post-Implementation Evaluation

As the National Council (NC) concludes its implementation period of the second National Financial Inclusion Framework (NFIF2), a comprehensive evaluation has been conducted to assess the framework’s effectiveness in addressing legal and regulatory barriers, as well as infrastructure challenges, that hinder access to financial services.

Significant Achievements

The evaluation results indicate that significant achievements have been recorded since the implementation period. Notably:

• Access to financial services and products increased from 42% in 2013 to 86% by 2017.
• Usage of formal financial services grew from 57.7% in 2013 to 65% in 2017.

Key Considerations for NFIF2

Based on the evaluation report’s recommendations, the NC has developed a new strategy that prioritizes:

• Promoting financial service providers to develop customer-centric products and services.
• Increasing usage of formal financial services among youth, women, and small and medium-scale enterprises (SMEs).

Rationale for Evaluation

The NC deemed it necessary to conduct this post-implementation evaluation to assess the extent of success, failures, and lessons learned from implementing NFIF2. This report provides an update on contemporary financial inclusion issues and new developments that have emerged during the implementation period.

Methodology

The evaluation employed a mixed-methods approach, combining both qualitative and quantitative data collection and analysis methods. The study involved:

• Surveys
• Focus group discussions
• Interviews with stakeholders to gather information on the design and implementation of NFIF2, as well as its impact on financial inclusion in Tanzania.

Key Findings

Stakeholders’ Perceptions of NFIF2 Design

• The majority of respondents rated the NFIF2 design process positively, indicating that it was inclusive and participatory.

Relevance of Financial Inclusion Vision and Definition

• Most stakeholders believed that the country’s long-term vision and definition of financial inclusion are relevant and aligned with national development priorities.

Infrastructure Challenges

• Despite progress made in addressing infrastructure challenges, the evaluation highlights the need for continued investment in:
  • Digital payment systems
  • Branchless banking
  • Mobile financial services to improve access to financial services.

Conclusion

The post-implementation evaluation of NFIF2 provides valuable insights into the effectiveness of Tanzania’s efforts to promote financial inclusion. While significant achievements have been recorded, ongoing challenges persist, particularly with regards to infrastructure development. The NC is encouraged by the results and will incorporate lessons learned from this evaluation into its future strategies for promoting financial inclusion in Tanzania.

Recommendations

1. Continued Stakeholder Engagement: Ensure that stakeholders are engaged throughout the design and implementation process to ensure that their needs and concerns are addressed.
2. Infrastructure Development: Prioritize investment in digital payment systems, branchless banking, and mobile financial services to improve access to financial services.
3. Monitoring and Evaluation: Regularly monitor and evaluate the impact of NFIF2 on financial inclusion to identify areas for improvement and inform policy decisions.

By addressing these recommendations, Tanzania can continue to make progress towards achieving its goal of improving the livelihoods of households by increasing access to and usage of financial services.