Arusha, Tanzania — Tanzanians have in the last two year's made money transactions worth $654m (Tsh1.7t) through the use of mobile money payments and transfers, an official of the Bank of Tanzania has said.
"The number of mobile money accounts were 20.4m in by September 2010 and by September 2012, the number of subscribers was 15m or 63% of the adult population, and adjusting for double counting it is estimated that about one third of subscribers have two accounts," said the bank's Governor Prof. Benno Ndulu.
"The number of monthly financial transactions mainly payments and transfer made through mobile money was Tsh1.9m in 2010.
"In September 2012 it skyrocketed to Tsh48m, in the same period, the total value of monthly transactions increased from Tsh1.8bn to Tsh1.7trillion," he said at the opening of the two-day 16th conference of financial institutions held at the Arusha International Conference Centre in Arusha, Tanzania.
"By our estimates, during the month of September alone, the value of mobile money transaction was about 14% of commercial bank's total private sector deposits, also impressive has been the increase in the number of user's of mobile phone financial services, evidently showing increased access to these services," he said in a keynote address at the conference held on the theme "Financial Innovation and Financial Inclusion in Tanzania."
The conference was officially opened by President Jakaya Kikwete who however decried the low financial inclusion of Tanzanians due to ignorance of existing services offered by banks and long distances between bank branches.
"Banks need to reduce on procedures for opening and operating accounts, these are discouraging would be clients, you should also introduce products that attract those who don't earn regular salaries, introduce lease and mortgage financing among other products," he added.
However Prof. Ndulu said millions of Tanzanians without bank accounts are able also use this service to make payments, send remittances and store funds for short periods conveniently and at low cost.
"Some companies like Precision Air, TANESCO and micro finance institutions have linked with mobile network operator's platforms to facilitate payment for goods, services, disburse loans, loan re-payments deposits and withdraws while some government taxes can now be remitted to Tanzania Revenue Authority (TRA) through mobile money," he said.
He pointed out that by riding on these rails, the institutions have reduced risks of carrying cash, cost savings on travel expenses while M-banking and M-payments has virtually obliterated physical distances in terms of effecting payment of bills among others," he said.
Prof. Ndulu said use of mobile money has also reduced transaction costs for small traders and farmers by reducing price information barriers and settlement periods.
"The transfers have reduced the costs of organizing social obligations relating to funerals and weddings," he said.