Digital loans surge 80 per cent with mobile convenience

DAR ES SALAAM: THE digital lending sector is witnessing a remarkable surge, with mobile-based loans increasing by 80 per cent as more consumers embrace the convenience of accessing credit through their phones.

The growth reflects a shift in borrowing habits, driven by speed, ease of use and wider mobile penetration across urban and rural areas.

According to the Bank of Tanzania (BoT) Annual Financial Inclusion Report 2024, digital loans surged by 79.9 per cent to 226.7bn/- last year, fuelled by the convenience of mobile money wallets.

“The rise of digital lending is boosting economic growth by expanding access to credit, enabling entrepreneurship and increasing financial participation across diverse sectors,” said the BoT Report.

Notably, women accounted for 152bn/-, or 67 per cent of the total borrowed amount, highlighting their increasing reliance on digital credit for entrepreneurship and household financial management.

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The number of digital loan accounts in the country surged by 101.6 per cent to 193.33 million over the past year, driven by rising mobile phone ownership, growing awareness of financial services and the increasing convenience of digital lending platforms.

This sharp growth underscores the accelerating shift toward digital finance and its expanding role in promoting financial inclusion across the country, according to the central bank.

Of the total digital loan accounts, 61.9 per cent were held by women, showing their growing participation in entrepreneurship and household financial management.

This trend reflects not only shifting gender dynamics in financial inclusion but also the impact of improved internet connectivity now exceeding 90 per cent which has enabled broader access to digital lending services, even in remote areas.

The report shows how financial institutions have increasingly leveraged Artificial Intelligence (AI) and alternative credit scoring models to more accurately assess customers’ creditworthiness and tailor loan amounts accordingly.

During the period under review, six banks and financial institutions actively partnered with mobile network operators to deliver digital credit services, significantly expanding credit accessibility nationwide.

The country’s advanced mobile money ecosystem, one of the most developed in Sub-Saharan Africa, has been a critical enabler for the rapid growth of digital lending, effectively bridging financial access gaps for both individuals and businesses across the country.