BoT: Mobile money closes access gap

TANZANIA: MOBILE money has steadily bridged the infrastructure gap, providing consumers with easier access to financial services and overcoming the limitations of traditional banking systems.

According to the Bank of Tanzania’s National Payment System Annual Report for 2024, traditional banks typically enforce strict Know Your Customer (KYC) requirements, minimum balance criteria and maintenance fees.

Banks also have limited presence in rural areas, restricting access for many individuals.

“Mobile money offers a streamlined KYC process and a widespread agent network, providing accessible financial services through multiple platforms, including affordable basic feature phones,” the Bank report stated.

By offering a simple and accessible alternative, it has empowered consumers to access essential financial services such as transfers, payments and savings, without the need for physical bank branches.

This accessibility has been transformative, allowing individuals to manage their finances conveniently, foster economic inclusion and drive financial empowerment, all while overcoming the rigid requirements and barriers of conventional banking systems.

The Tanzania Communications Regulatory Authority (TCRA) reports that the number of basic feature phones increased by 7.57 per cent to 56.90 million in 2024, up from 52.90 million the previous year.

Meanwhile, the number of smartphones rose by 18.07 per cent to 23.42 million in 2024, compared to 19.84 million in 2023.

Smartphones have driven greater adoption of merchant payments by providing more options, such as LIPA na MPesa and Quick Response (QR) Codes.

Active mobile money subscriptions also grew by 17.46 per cent reaching 63.21 million in 2024, up from 51.72 million in 2023.

This growth is attributed to simplified KYC processes, consumer trust, affordable mobile phones, convenience, and the interoperability of providers enabled by the National Switch (TIPS) and the Standard Quick Response Code (TANQR).

Other contributing factors include improved network coverage, ongoing financial inclusion efforts, and cashlite initiatives, particularly the affordability of digital financial services.

Mobile money agents increased by 18.97 per cent, reaching 1,475,281 in 2024, up from 1,240,052 in 2023. A broader agent network has been crucial in driving mobile money adoption, facilitating liquidity management.

The volume of mobile payment transactions grew by 26.73 per cent, reaching 6,413.94 million in 2024, compared to 5,061.20 million in 2023.

The corresponding value also rose by 28.54 per cent, reaching 198.86bn/- in 2024, up from 154.71 bn/- in 2023. This growth in mobile money activity is attributed to economic growth, expanded agent networks, service diversification, and progressive regulation.

The extensive agent network has made transactions seamless, even in remote areas.

Mobile money has evolved beyond transfers, integrating international remittances and merchant payments, attracting millions.

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Supportive regulatory policies have further enhanced trust, fuelling adoption. During the year, the Bank implemented measures to improve the affordability of digital payments, including mobile payments