Financial capability 'needs a boost' in Tanzania
A lack of financial capability in Tanzania is restricting some of those in the rural population from accessing banking services.According to Daily News, commercial banks are not positioned evenly around the country, instead being gathered around urban areas, meaning even those who do have bank accounts find it difficult to reach branches.
Just ten per cent of the population have access to formal banking options, while 54 per cent are completely excluded, a Fin scope report revealed in 2009.
Households are then forced to rely on informal services, which are accompanied by high transaction costs that can push them further into poverty.
The Citizen recently noted 75 per cent of the population live in rural areas and a lack of facilities also leads to safety risks as people have to carry around large amounts of money after taking out loans.
However, some schemes are being introduced to try and tackle the issue, as Barclays has been promoting financial literacy in Tanzania, which has enabled more people to start their own companies.
Similarly, 2,400 village savings and loans associations will be created by July 2012 as a part of a microfinance initiative called Banking on Change.