Dar es Salaam — When Hamis Mfaume started his business as an mobile money services agent some three years ago, he had limited capital to expand.
Later on, he discovered the opportunity of borrowing through mobile phone as he thought he could not meet the conditions of commercial banks. "I remember I started borrowing with Sh20,000 from Airtel Money's Timiza loan scheme and after repaying on time, the amount increased day after day. Now, I can borrow up to Sh1 million and this money is really boosting my capital," said the Temeke resident.
Mr Mfaume is among Tanzanians who are benefiting from loans provided by mobile operators including Airtel, Vodacom and Tigo.
The rising use of mobile money is seen potential for benefiting Tanzania's economy as it provides alternative loans to people who cannot access credit from banks.
The presence of fintech operators like Tala and Branch is even stirring up the trend and changing the way of accessing quick loans in the age of widespread usage of mobile communication gadgets especially tablets and smartphones.
Tanzania has over 50 banks but the largest share of branches is concentrated in a few cities. According to FinScope Study of 2017, commercial banks serve only 17 per cent of the Tanzanian adults while the uptake of mobile money services stands at 60 per cent.
With the technological innovations, mobile phone operators are now offering micro-loans and some of them are partnering with the banks to issue the mobile-phone based credits.
The bank loans are attached with some stringent conditions like the requirement for national ID and collateral but the mobile loans are just at finger tips.
Stakeholders say the mobile money services have a potential to bring positive results to the economy as people can now borrow money for small investment capital.
Financial Sector Deepening Trust (FSDT) executive director Sosthenes Kewe says the services helped people to access loan even in areas which have no banks.
"So we see in future this system will bring positive impact to the economy because the mobile companies are very innovative in identifying kinds of products they should offer," he says.
"The use of mobile money has bring big impact as number of people can send, receive and making payment wherever they are," he adds.
Vodacom Tanzania has a partnership with Commercial Bank of Africa Tanzania ina M-Pawa - a mobile phone-based bank account which allows M-Pesa customers to deposit and borrow up to Sh500,000. Until November last year, it was reported that some seven million people had that account.
The government also sees this potential and plans to create conducive ground to reach more people especially in the rural areas.
"We are working in collaboration with the mobile operators to make sure that all Tanzanians have access to telecommunication network by 2022," said the deputy Minister for Works, Transport and Communication Mr Atashasta Nditiye.
According to the Tanzania Communications Regulatory Authority (TCRA), mobile money subscription reached 23.3 million in December 2018 up from 20.89 million recorded in September 2018.
Vodacom's M-Pesa remains the market leader accounting for 39 per cent of the mobile money subscription market share followed by Tigo's Tigo Pesa at 32 per cent and Airtel's Airtel Money at 21 per cent.
Halotel's Halopesa holds six per cent of the market share while Zantel's Ezy Pesa and TTCL account for two per cent and 0.13 per cent respectively.
The regulator's statistics also indicate that the telecom subscription was 43.6 million in December 2018 while internet service users reached 23.1 million.