Tanzania: Financial institutions charged to extend to rural areas

Nov 30, 2016

Extending financial services to rural areas will strengthen the economy

Tanzania's Minister for Finance and Planning, Phillip Mpango has charged banks, credit organizations and social security funds to extend financial services to rural areas in order to enrol over 75 per cent Tanzanians into formal financial services and covers. While speaking at the opening of the 18th Bank of Tanzania (BoT)'s two-day conference of financial institutions held last Thursday, Mpango noted that the low penetration in the rural areas have left many potentials untapped in the financial sector. With over 40 million of her population living in rural areas, extending financial services to rural areas through sensitization, trainings and enrolment will widen coverage of financial services and strengthen the Tanzanian economy. Since the rural population depends on largely on agriculture, the BoT Governor, Benno Ndulu urged financial institutions to make their loans farmers friendly through affordable interest rates to simplify the process of bringing rural residents into formal financial system. Tanzania's large rural population makes access to financial services a challenge. The World Bank reports that less than half of the rural population have active bank accounts used in the last 90 days compared with more than 7 in 10 urban citizens.