8 February 2013

Tanzania: Postal Bank Launches Banking Agents

THE Tanzania Postal Bank (TBP) is out to broaden the number of bankable population by introducing agents where one needs only 2,000/- to open an account.

This makes the bank the first to rollout such a service, following recently released guidelines by the central bank aimed at increasing people's access to financial services. Official records show that hardly 14 per cent of Tanzanians are currently having access to formal banking services.

TBP's Director of Technology and Operations Jema Msuya said the bank was enhancing the advances of technology to bridge the un-bankable gap. "The technology enables us to close the gap. The pilot project started two years ago (2011) in Dar es Salaam and it was superb," Mr Msuya said at an interview.

He said banking agents would combine bank transaction and mobile money payment facilities for 'cash-in and out' process and also be given Point-of-Sales (PoS) gadgets. "The bank agency regulations are out and we have already been licensed by the Bank of Tanzania (BoT) late last year to roll out the operations," the Director said.

The Bank's Chief Manager e-Banking, Mr Mshamma K. Mshamma, said the bank would rollout the service next month after scrutinising 32 agents who have forwarded their applications. "Apart from normal business licences, the agents are required to deposit only 500,000/- which will act as transaction amount.

No additional deposits or guarantee is required," Mr Mshamma said. The 500,000/- will be deducted or added when a transaction is carried. The bank said at the moment the maximum withdrawal has been restricted to 500,000/- but will later be uplifted once the tempo picks up.

The Chief Manager said the opening process takes about one hour and the customer is given his or her transaction card immediately after finalisation of the process. The card enables one to withdraw money from ATMs as well. "Banking agency is a propoor service that targets the rural dwellers who are mostly outside the financial system brackets," Mr Mshamma said.

Reaching poor clients in rural areas is often prohibitively expensive for financial institutions since transaction numbers and volumes do not cover the cost of a branch. Analysts also said that lowincome clients often feel more comfortable banking at their local store than walking into a marble branch.

Last month, TBP conducted trial banking agents using their staff in Kilwa District and in two days, 147 people opened savings accounts. This demonstrates the need of such services in rural areas.

The banking agent, rather than a branch teller, is the owner or an employee of the retail outlet which conducts the transaction and lets clients deposit, withdraw and transfer funds, pay their bills, inquire about an account balance, or receive government benefits or a direct deposit from their employer.

Equity Bank, which runs banking agents services in Kenya, and DCB Commercial Bank have said they are looking forward to introducing it in the country.

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