Dar es Salaam — Stimulating innovation as a way of boosting the financial sector was top on the agenda when the Bank of Tanzania (BoT) convened a meeting with policymakers here yesterday.
The BoT director of policy and research, Mr Johnson Nywella, asked policymakers and financial sector regulators to find ways of minimising risks in innovation to provide a medium that can stimulate innovation in the financial sector.
Mr Nywella was speaking during a meeting that brought together innovators, product solution designers, financial services providers and policymakers.
The meeting was touted as a major platform for pondering on the future of the financial sector through innovation. He spoke of how the financial sector plays a role in mobilising savings and allocating credit across space and time.
This, he noted, offers not only payment services but also enables households, farmers and medium and small-scale enterprises to cope with economic uncertainties.
He pointed out how telecommunications and information technology have opened the financial sector to non-traditional financial sector players, such as mobile network operators and fintechs.
Prior to the introduction of mobile money, financial inclusion level was at 16 per cent but it has increased up to 65 per cent, only 10 years after entering the market, recent data from financial institutions show.
At least 22 per cent of Tanzanians faced unexpected medical expenses in the past 12 months. A quarter of Tanzanians have no any form of retirement plans while 45 per cent who save tend to keep money in their homes, according to FinScope Tanzania 2017.
Yet, the financial researcher notes, although 60 per cent of Tanzanians have taken up mobile money services, 99 percentage of purchases are still done in cash.
For his part, the Financial Sector Deepening Trust (FSDT) executive director, Mr Sosthene Kewe, said there was a need to think outside the box to enable the financial sector contribute to the economy.
But, what re-defines the future? According to the FSDT head of Research, Mr Elvis Mushi: "Our interest lies in disrupting the current and re-defining the future."
He thinks there is need to find alternative and innovative ways as mots Tanzanians still rely on cash payment systems.
"Purchases are still done in cash. This clearly shows the need to think differently and keep pushing for new solutions that work for Tanzanians," he said.