Studies conducted by Standard Bank (Stanbic) and FinScope Tanzania indicate that mobile money wallets have gained significant traction as the preferred mode of payment for business and financial transactions in Tanzania. This trend sets Tanzania apart from other African countries where cash payments still dominate and mobile money adoption remains slow.
Stanbic’s analysis of trade trends in Tanzania throughout 2022 revealed a notable shift from electronic bank transfers to mobile money as the preferred method of payment for sales. This shift signifies the increasing popularity of mobile money, while electronic fund transfers (EFTs) are losing favor as a means of receiving payment for sales. The findings were part of Stanbic’s Trade Barometer report for Tanzania, released in late June.
FinScope Tanzania’s 2023 report corroborated Stanbic’s findings, highlighting a significant increase in the adoption of mobile money services among adult Tanzanians, rising from 60% to 72% since 2017. This increased uptake of mobile money has played a crucial role in expanding financial inclusion levels across the country. According to the report, formal financial inclusion has risen to 76% of the population, a notable increase from 65% in 2017. The growth can be attributed to the widespread ownership of mobile phones, which increased from 63% to 75% during the same period.
The FinScope report also revealed a rise in access to commercial banking services, which increased from 17% to 22% since 2017. This growth is largely attributed to the accessibility of banking services through mobile phones. However, the report highlighted that mobile phone ownership skewed towards men (80%) compared to women (71%). Additionally, around 19% of the population remains financially excluded, though this figure has decreased from 28% in 2017.
Mobile Money Leads Financial Services
Among Tanzanian traders, 67% preferred mobile money as their primary financial service, followed closely by transactional accounts at 66%. Online banking trailed behind at 50%. Payments for sales through mobile money and credit cards increased proportionally, while EFT payments experienced a decline.
Despite the growing use of mobile money, access to credit remains a challenge for Tanzanian traders. Only 42% of respondents in the survey found credit access to be “easy.” The percentage of trading companies offering credit terms decreased from 44% to 42%. However, there was a slight increase in firms receiving credit advances from suppliers, rising from 39% to 45%.
