The National Financial Inclusion Framework sets the stage for the Financial Inclusion vision based on the concrete improvements that the country would like to see in the lives of all Tanzanians through the use of financial services. It galvanizes all relevant stakeholders in financial services under one common vision of success and provides strategic direction for all initiatives for Financial Inclusion in the country. The working definition of Financial Inclusion for Tanzania entails the “regular use of financial services, through payment infrastructures to manage cash flows and mitigate shocks, which are delivered by formal providers through a range of appropriate services with dignity and fairness”.
The level of Financial Inclusion in Tanzania is still low despite various initiatives hitherto deployed by public and private sectors. By 2012, only 17 percent of adult population (about 3.7 million) has access to bank accounts. However, leveraging on mobile telephony technology with 30 million subscribers has significantly enabled nearly 43 percent of the adult population (9.8 million) to have active mobile payment accounts by September 2013.
Building on the country’s recent successful experience with mobile money services and other technology-driven financial services, the Framework sets an elaborate plan to increase Financial Inclusion in Tanzania. This is in terms of achieving 50 percent formal access, 50 percent formal usage, 25 percent of adult population with two weeks worth of income in formal savings, and 25 percent of adult population with electronic information records on personal profile, collateral and credit history by 2016.
In working towards the long-term vision and achieving set targets in the medium term, the Framework has identified fundamental barriers that limit the growth of Financial Inclusion in Tanzania. These include supply side barriers ranging from high interest rates, inappropriate services that do not meet demand-side needs, and high costs due to inefficiencies of service delivery. There are also demand side barriers such as information asymmetry, irregular income patterns, and financial literacy. In addition, structural and regulatory barriers include, stringent or lack of proportionate requirements for client on-boarding, lack of regulatory
