Financial inclusion key to development: Governor

TANZANIA: THE Bank of Tanzania Governor, Mr Emmanuel Tutuba, has said financial inclusion is key to sustainable growth especially if the focus is on providing customer-centric products.

To further increase financial inclusion penetration, the focus should be directed to services to existing customers while striving to reach undererved or unreached groups.

Mr Tutuba said over the weekend that as alluded to National Financial Inclusion Framework 2023-28, groups that are underserved and are considered as priority segments are women; youth; Micro, Small and Medium Enterprises (MSMEs); persons with disability; and small-holder farmers and fishers.

“If these groups will be well included in the financial system by addressing the barriers to access and usage, we will experience higher economic growth,” he said during the Tanzania Bankers Association (TBA) second conference on financial inclusion which brought together stakeholders from the financial sector, private sector, governments, development partners and academia held in Dar es Salaam.

The conference theme was ‘Sustaining Economic Development through Financial Inclusion’ and discussed opportunities, challenges and how to integrate more Tanzanians into the formal banking space. The Governor also noted that the cost of financial services, be it bank charges, transaction costs or lending rates are acting as a barrier to financial inclusion as well as a burden and even a cause of poverty to people.

“Let’s consider this matter in our discussions and propose appropriate measures to curb it,” Mr Tutuba said adding: “We now have in place the Tanzania Instant Payments System (TIPS), whose aim is to enable interoperability and lower transaction costs.” The TBA Chairman Theobald Sabi said banks have always been working with the government and are ready and committed to enhancing financial inclusion.

“We understand that collaboration is key, and we are actively engaging with Mobile Network Operators (MNOs) and other stakeholders to foster partnerships that can broaden the reach of financial services.

“Embracing fintech startups is another avenue we are exploring. Recognising the dynamism and innovation brought by these startups, we aim to integrate their solutions into our banking ecosystem to create a more inclusive and tech-savvy financial sector,” he said.

According to BoT, last May financial inclusion report showed that the percentage of adults with access to and usage of formal financial services has increased from 86 per cent and 65 per cent in 2017 to 89 per cent and 76 per cent in 2023, respectively.

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