Mobile money transactions up as move to cashless economy gains tract

MOBILE money transactions maintained steady growth in 2022 with significant increase in numbers and value, signaling deepening of financial inclusion and a burgeoning cash-lite economy.

According to recent published Tanzania Communications Regulatory Authority (TCRA) statistics, the value of mobile money transactions has been growing at the rate of 3 per cent to 140.9 tri/- last year, up from 137.2 tri/- in 2021 and 127.9tri/- in 2020.

The statistics shows that the number of transactions has been increasing for the past three years from 3.4 billion in 2020 to 4.2 billion in 2022 as the shift towards cash-less economy is steadily gaining momentum.

The number of subscribers has also been increasing at the average rate of 17 per cent per year, while annual average transactions per user have an average decrease of one per cent per year.

The industry enjoyed a substantial increase in the number of registered accounts, where the number of mobile money accounts for the past 12 months had a growth rate of 1.4 per cent, while number of transactions has been growing at the rate of 2.8 per cent.

According to the statistics, more transactions were done in December than any other month of the quarter because of many activities due to end of the year festivals.

Currently, the mobile money in Tanzania is mainly used to transfer value from one person to another, for payment of goods and services, paying utility bills, salaries of some workers, taxi fares, micro-credit, savings and micro-insurance.

Mobile money is a key driver of socio-economic growth by creating employment, driving business productivity, facilitating savings and facilitating investment, contributing to formalising the economy, and providing stability during economic downturns.

It is the main driver of financial inclusion, contributing directly to Tanzania’s economic growth and social development objectives. As set out in Tanzania’s National Financial Inclusion Framework, “mobile money services have been the main driver in the provision of financial services to the under-served especially women and people living in rural areas

Commenting, an economist-cum- investment banker, Dr Hildebrand Shayo, said the growth in the value of mobile money transactions shows there is an improvement in the mobile money sub sector to development of the payment ecosystem signals deepening of financial inclusion and promotion of emerging cash lite economy.

“What this increase implies is that mobile money is gradually becoming a major means of payment for the unbanked and underserved in Tanzania,” he said.

The increasing value of mobile money suggests an improved environment for mobile money solution that is bringing together different industry players such as banks and mobile money operators to establish business, he said.

The increase in mobile money transactions is prompted by recent advances in handset functionality, chip and mobile network technologies and of recently point of sale (POS) infrastructure.

Vodacom’s M-Pesa platform has the largest share of the mobile money market with 39 per cent of mobile money accounts in the first and second quarters of 2022/2023 year, according to the statistics.

MIC Tanzania Limited’s Tigo Pesa is the second largest in the mobile money market with 27 per cent share in the second quarter up from 25 per cent in the first quarter.

It is followed by Airtel Money under Artel, a subsidiary of Bharti Airtel of India which commands 22 per cent of market share in the second quarter down from 25 per cent in the first quarter.

HaloPesa, a mobile money service by Halotel Viettel Tanzania which trades as Halotel, has 9.0 per cent market share and TTCL Pesa by state-owned TTCL commands three per cent of the mobile money market down from four per cent in the first quarter.

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