Democratising finance gains strong momentum

DAR ES SALAAM: THE push to democratise finance in the country is gaining momentum, evolving from a narrow focus on access to a broader agenda of meaningful financial inclusion. At its core, democratising finance means ensuring that individuals and businesses regardless of income level, geography, or social status can access and effectively use a wide range of financial services.

This transformation is increasingly being shaped by a coalition of stakeholders, whose collective efforts were recently underscored during the Financial Sector Forum held on 9th– 10th April in Dar es Salaam and officiated by Ambassador Khamis Mussa Omar the Minister for Finance, where industry players, regulators and policymakers convened to reflect on the sector’s role in advancing inclusive growth and the aspirations of Dira 2050.

Historically, the country’s financial system served a limited segment of the population, largely concentrated in urban centres and formal employment sectors. Rural communities, informal workers and small-scale entrepreneurs were often excluded, relying on cash-based transactions and informal savings mechanisms. This exclusion constrained economic mobility and limited the ability of individuals to build assets, manage risks, or participate in broader economic opportunities.

Today, that narrative is steadily changing, driven largely by mobile technology. Telecommunications companies, in collaboration with financial institutions, have been at the forefront of this shift. Mobile money platforms such as M-Pesa, Mixxby-Yass, Airtel Money and the like, have transformed how Tanzanians interact with money, extending financial access to millions. These services enable users to send and receive funds, pay bills and store value using basic mobile phones, significantly lowering the barriers to entry into the financial system.

Commercial banks have complemented this progress by partnering with mobile network operators to bridge the gap between traditional banking and digital finance. Through mobile wallet integration and agency banking models, banks are expanding their reach while maintaining regulatory oversight and stability. This convergence between banking and telecommunications has been a defining feature of Tanzania’s financial inclusion journey.

The Bank of Tanzania has played a central coordinating role by fostering an enabling regulatory environment. Progressive policies such as those promoting interoperability across mobile money platforms and market segments have reduced transaction friction and improved convenience for users. At the same time, regulatory vigilance has helped safeguard the integrity of the financial system, particularly as innovation accelerates.

Government initiatives have also been instrumental. National financial inclusion frameworks have set clear targets for expanding access, with a strong emphasis on underserved populations. The digitisation of public payments, including government transfers, tax collection and utility payments, has further encouraged the adoption of formal financial channels, reinforcing the shift away from cash-based systems. The Dar es Salaam Stock Exchange (DSE) represents another important pillar in the democratisation agenda. Traditionally dominated by institutional investors, the exchange has increasingly sought to broaden retail participation. Investor education initiatives, simplified onboarding processes and the promotion of collective investment schemes are gradually lowering entry barriers.

However, participation in capital markets remains relatively low, with many Tanzanians still perceiving stock market investment as complex or inaccessible.

To address this, stakeholders are exploring digital investment platforms that allow individuals to invest small amounts, making equity ownership more attainable. Fintech companies are playing a catalytic role in this space, introducing innovative solutions that go beyond payments. Digital lending, savings applications and microinvestment platforms are expanding the range of financial services available, particularly to underserved populations. By leveraging alternative data such as mobile transaction histories, these platforms are enabling access to credit for individuals without traditional collateral or formal credit records.

However, rapid innovation brings new risks. Consumer protection has emerged as a key concern, especially in digital lending, where high interest rates and opaque practices can undermine user trust. Regulators are increasingly focused on striking a balance between fostering innovation and ensuring fair treatment of consumers.

Civil society organisations also contribute significantly, particularly through financial literacy initiatives. Access alone is not sufficient; individuals must have the knowledge and confidence to use financial services effectively. Education efforts aimed at improving financial capability are therefore essential in translating access into meaningful inclusion.

Women and youth remain central to the financial inclusion agenda. Tailored financial products such as group savings schemes, microloans and entrepreneurship financing are helping address structural barriers faced by these groups. Empowering women financially has well-documented multiplier effects on household welfare and broader economic development.

Despite the progress, challenges persist. Digital literacy and infrastructure gaps, especially in rural areas, can limit effective usage of financial services. Additionally, trust remains a critical issue, as some users remain hesitant to adopt digital financial tools.

Looking ahead, sustained collaboration among stakeholders will be essential. Strengthening partnerships between regulators, financial institutions, telecom operators and fintech firms can unlock further innovation. Expanding digital identification systems and leveraging data analytics will also be key to deepening access to credit and other services.

Ultimately, democratising finance in Tanzania is a multifaceted and ongoing journey. As highlighted during the recent Financial Sector Forum in Dar es Salaam, the goal is not merely to expand access, but to ensure meaningful participation where every citizen can save, invest, borrow and build a more secure financial future. In this context, financial inclusion is not just a policy objective; it is a foundational pillar for achieving sustainable and inclusive envisioned under Dira 2050.