FinScope: Financial inclusion improves

TANZANIA has made great strides in extending financial services in recent years thanks to a rise in mobile money and banking, according to a new FinScope Tanzania 2023 report.

The report launched on Monday showed formal financial inclusion has improved in the last six years from 65 per cent in 2017 to 76 per cent in 2023. It shows that since 2017, the number of adults excluded financially has fallen to 6.4 million in 2023 from 7.8 million in 2017.

Commercial banking services expanded to 22 per cent in 2023 up from 17 per cent in 2017 the report shows.

However insurance penetration went down from 15 per cent to 10 per cent. The Permanent Secretary in the ministry of Finance, Dr Natu Mwamba, said the formal financial inclusion improved but there is a significant reduction in financial exclusion across gender. Dr Mwanba, an economist, pointed out that there is a “stagnation in the banking gender gap”, which she identified as an opportunity for banking representatives. Additionally, she made a strong call to action for the insurance sub-sector. “Unlike other sub-sectors, insurance penetration has, a trend contrary to its target,” she said.

The Financial Sector Development Master plan is targeting the insurance penetration to reach 50 per cent of the adult population accessing and using insurance products by 2030. The report launch was also witnessed by the Governor of the Bank of Tanzania and Chairperson of the National Council for Financial Inclusion, Mr Emmanuel Tutuba.

The survey measures the demand, access, uptake and usage of financial services across mainland Tanzania and Zanzibar.

This year’s survey follows those from 2006, 2009, 2013 and 2017 to track and benchmark patterns of use across all types of formal and informal financial services over almost two decades.

The BoT Governor, Mr Emmanuel Tutuba, further emphasised on the importance of researches such as the one conducted by FinScope Tanzania for the continuous measurement of the state of financial inclusion and their significance in the measurement and crafting of the National Financial Inclusion Frameworks.

He reassured the delegates that the trends observed by FinScope Tanzania 2023 and especially the gaps, which clearly pinpoint a dire need towards regular usage for increased financial growth, will inform key shifts in the new National Financial Inclusion Framework 2023-2028, which is anticipated to be launched soon.

Financial Sector Deepening Tanzania (FSDT), Interim CEO, Mr Eric Massinda, said there would be deep stakeholder engagements for wider dissemination of the FinScope Tanzania 2023 findings in the next couple of months.

“The launch of the key findings report is just the beginning of a larger public sector engagement in the drive towards evidence-based decision making and solutions development in the financial sector,” Mr Massinda said.

Mr Massinda said Tanzania has made big strides because since 2017, the number of adults excluded financially has fallen to 6.4 million in 2023 from 7.8 million.

“This reduction in those excluded is even more significant because the adult population has grown 23 per cent over the same period,” he said, adding that the rise in mobile money and banking has fueled the rise.

He said that considerable progress is still needed to get Tanzanians to formally transact and use financial services for development. Mr Massinda further said that the insurance sector, from a supply side perspective, saw an 82 per cent increase of its total gross premiums written (GPW) between 2017 and 2023.

“FinScope Tanzania, being a demand side household survey, measures insurance uptake in terms of people reporting that they have insurance cover, hence awareness is key,” he said.

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