Tanzania: Mobile money transfers account for 47% of GDP
Within a decade, mobile money exceeded the small network laid by banks to extend financial services to the vast majority of poor Tanzanians.Mobile money transfers accounts for 47 percent of Tanzania's GDP with Sh43 trillion transferred on mobile phones annually. This development is consequent of the mobile money revolution which has increased financial inclusion in Tanzania to 86 percent, putting the nation ahead of most Sub-Saharan countries. Within a decade, mobile money exceeded the little network laid by banks to extend financial services to the vast majority of poor Tanzanians. As disclosed in a World Bank report titled 'Tanzania Economic Update, Money Within Reach; Extending Financial Inclusion' released last week, mobile money has bridged the gap between the people and banking services.
Mobile money is now the most popular instrument used by Tanzanians to save. Interestingly, the increase in savings has occurred despite the decline in the proportion of people who saved using services provided by a bank or other financial institutions from 11.9 to 9 per cent, indicating that some individuals may have moved away from banks towards mobile money. "Mobile Network Operators have a wealth of data pertaining to the financial transactions of users and increasingly use this information to assess client creditworthiness. Such information, if shared with other financial actors, could also contribute to extending bank credit to a larger number of individuals, and to micro and small informal businesses. Over time, this process will support a path towards formalization for these mostly informal businesses." the World Bank report stated. Ranked in the bottom quartile of nations in the area of access to traditional financial access points, with 2.5 bank branches and 6.4 ATMs per 100,000 adults, the country provides poor access to traditional banking services, paving the way for the growth of mobile money. Mobile money market leaders in Tanzania are Vodacom's M-Pesa with 54 percent, Tigo Pesa with 29 percent, Airtel Money with 13 percent and Ezy Pesa 4 percent respectively.