Financial Crime World

Structural Barriers Hinder Financial Inclusion in Tanzania

Despite commitments to increase formal access to financial services under the African Financial Inclusion (AFI) initiative, Tanzania still faces significant structural and regulatory barriers. According to a World Bank survey, only 24% of adults in Africa have an account at a formal financial institution, while in Tanzania, this proportion is even lower at 17%. The provision of SME and agribusiness finance has also been inadequate, with only 10.6% of micro- small-medium enterprises (MSMEs) having access to finance from formal institutions.

National Financial Inclusion Framework

To address these challenges, the National Financial Inclusion Framework was launched today, aiming to spur financial inclusion in Tanzania by addressing structural barriers and regulatory frameworks. The framework identifies key core enablers to be implemented, including:

  • Proximity: implementation within six months
  • Robust electronic platforms: implementation within three years
  • Robust information and easy client on-boarding: implementation within three years
  • Informed customers and consumer protection: implementation within three years

A coordinating structure has also been established to oversee the implementation process, comprising 11 member institutions from various ministries and financial regulatory authorities. An impact assessment will be conducted after three years to review the effectiveness of the initiatives included in the framework.

Key Stakeholders

The development of the framework has been a collaborative effort, with great enthusiasm and commitment demonstrated by members of the National Council and national technical committees. Key stakeholders involved in the launch include:

  • Financial Inclusion National Council: comprising 11 member institutions from various ministries and financial regulatory authorities
  • Honorable Minister for Finance, Ms. Saada Mkuya
  • Vice President of the United Republic of Tanzania, Dr. Mohamed Gharib Bilal
  • Guest of Honor, Her Majesty Queen Máxima of the Netherlands

Key Targets

The framework sets specific targets for each of these areas:

  • Financial access target: 50% by 2016
  • Specific targets for core enablers:
    • Proximity: implementation within six months
    • Robust electronic platforms: implementation within three years
    • Robust information and easy client on-boarding: implementation within three years
    • Informed customers and consumer protection: implementation within three years

With the launch of this framework, Tanzania is expected to take significant strides towards increasing its level of financial inclusion.