Tanzania: Mobile Money Drives Significant Increase in Financial Inclusion in Tanzania

Tanzania is experiencing a rapid improvement in financial inclusion, thanks to the widespread adoption of mobile phones and the increasing usage of mobile money services in the country, as indicated by a 2023 study conducted by Financial Sector Deepening Tanzania (FSDT), a local organization dedicated to advancing the financial sector and access to financial services.

The 2023 FinScope Tanzania study, which surveyed Tanzanian adults’ financial needs, preferences, and behaviors, reveals a substantial rise in formal financial inclusion within the Eastern African nation over the past few years. The formal financial inclusion rate has surged by 12 percentage points, advancing from 65% in 2017 to 76% in 2023, while informal financial services experienced a marginal 1% decrease during the same period.

Mobile money services have played a pivotal role in expanding financial access in Tanzania, with a remarkable 12% increase in penetration, soaring from 60% in 2017 to 72% in 2023, according to the study. In contrast, banking services witnessed a more moderate growth rate, climbing by 5% from 17% in 2017 to 22% in 2023.

The Tanzania Communications Regulatory Authority (TCRA) reports an annual average increase of 13% in mobile money subscriptions. As of March 2023, the country recorded a total of 44.35 million mobile money subscriptions, with an annual transaction value exceeding US$56 billion in 2022.

Vodacom leads the thriving mobile money market in Tanzania, commanding a 36% share of mobile money accounts, followed by Tigo (31%), Airtel (21%), Halotel (9%), and TTCL (3%).

The surge in mobile money adoption in Tanzania is attributed to the substantial growth in mobile phone usage across the country. Data from Statista reveals a steady increase in mobile cellular subscriptions per 100 inhabitants in Tanzania, rising from nearly zero in 2000 to approximately 75.5 by 2015. In recent years, this number has stabilized around 70 and reached approximately 85 in 2021.

In parallel, Internet penetration is steadily rising. As of March 2023, the number of Internet subscriptions reached 33 million, with mobile wireless subscriptions accounting for an impressive 99.75% of all Internet subscriptions, according to TCRA data.

While Tanzania’s fintech sector remains smaller in comparison to regional leaders like Nigeria, Kenya, and South Africa, the country is witnessing initiatives from both the government and the private sector to foster its growth and innovation.

PesaTech, a fintech acceleration program launched last year, aims to support early-stage and post-revenue startups with mentorship, guidance, and key business connections. Additionally, the government of Zanzibar is working on transforming the region into a prominent tech hub, offering incentives such as tax exemptions and special work visas to attract tech companies.

Silicon Zanzibar, a key initiative in this endeavor, has already welcomed its first major anchor company, Wasoko, a Kenyan retail tech startup. Furthermore, Tanzania has seen the emergence of innovative startups such as Nala (a digital wallet and remittance startup), Ramani (focused on financial infrastructure for supply chains), and Jamii (offering mobile micro-health insurance products).