taking mobile financial services to the next level in africa: tanzanian experience
DESCRIPTION
Outline: Tanzanian MFS Landscape: Current Status; Maximizing Opportunities in Tanzania; Mitigating Challenges and Risks in MFS in Tanzania; Pushing MFS to the next level in Tanzania; and Lesson for Africa: Key Take Homes.TRANSCRIPT
Taking MFS to the Next Level in Africa:
Tanzanian Experience
Prof. Benno Ndulu,Governor, Bank of Tanzania
2nd Leaders’ Roundtable of the African Mobile Phone Financial Services Policy Initiative (AMPI)
NAIVASHA, KENYA, 4 - 6 FEBRUARY 2014
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MFS Experiences in Tanzania
• Tanzanian MFS Landscape: Current Status• Maximizing Opportunities in Tanzania• Mitigating Challenges and Risks in MFS in
Tanzania• Pushing MFS to the next level in Tanzania• Lesson for Africa: Key Take Homes
Outline
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MFS Experiences in Tanzania
MFS Landscape in Tanzania:Current Status
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MFS Experiences in Tanzania
MFS Access Trends
Source: Bank of Tanzania
94% of adult Tanzanians have access to MFS as of December 2013That is: 31.8 Millionregistered accounts
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MFS Experiences in Tanzania
Usage Trends
Source: Bank of Tanzania
49% of adult Tanzanians use MFS as of December 2013That is: 11.01 Millionactive users
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MFS Experiences in Tanzania
Comparison of Access & Usage Trends
Source: Bank of Tanzania
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MFS Experiences in Tanzania
99.9 MillionTransactions valued at
TZS 3.1 Trillion (December, 2013)
Tanzania MFS Transaction trends 2012-2013: Comparison of Half Year Periods (July-December)
Daily Average transactions:3.17 MillionTransactions valued at
TZS 97.5 Billion(December, 2013)
Source: Bank of Tanzania
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MFS Experiences in Tanzania
A Competitive Market of 4 Telco’s pushing the MFS to the next level in Tanzania No large dominant player
No exclusivity of agents
Picture source: GSMA website
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MFS Experiences in Tanzania
Maximizing Opportunities in Tanzania
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MFS Experiences in Tanzania
• Bank branches/agencies 500• Serving 22 Million Adults• Access to banks 17% of Adults • 50 banking institutions
Access Dimension-Banking Sector
• ATMs 1,452 concentrated in urban areas • POS 2,544 in urban and touristic areas • Internet banking: 6% internet penetration• Agent banking: 4 banks • Mobile banking
17% Access formal financial institutions (WB, 2012)22% including SACCOS (NFIF, Dec 2013)27.3% Informal financial institutions (2009, Finscope)
• Cash transactions complemented with electronic transaction via mobile banking
• Access to banked customers
Opportunities: 46% of Adults Population excluded from formal financial Services
Source: FSDT, 2012 GIS Census of Cash outlets
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MFS Experiences in Tanzania
• Mobile Money agents (74,000 as Nov 13) out number financial institution’s access points and branches ( serve 40% of the population and occupying 19% of the landmass)
• Compared to bank presence including ATMs and MFI serve only 12% of population (FSDT, 2012 GIS Census of Cash outlets)
Access Dimension-Mobile Financial Service: Non-bank led
• Mobile Money Subscribers 30.3 Million (Accounts) or 90% of Adults (September 2013)
• Active Users of Mobile Money 9.9 Million or 44% of Adults (September 2013)
• Increased Access of financial services to unbanked• Increased formal institutions to leverage on the
technology• Improved welfare: livelihood and productivity
AGENTS
Impact
Opportunities: 90% of adult population subscribe to MFS: An impetus for Financial Inclusion
Source: FSDT, 2012 GIS Census of Cash outlets
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MFS Experiences in Tanzania
Mitigating Challenges and Risks in MFS in Tanzania
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MFS Experiences in Tanzania Risk Mitigation Framework
Risk
Model
Reliability
KYC
legal
Regulators
Mitigation Measures
E-money
Security
liquidity
Allow banks and no-banksto operate
Regulatory arbitrage
Service Provider’s capacityBusiness continuity
Cooperation with TelcomRegulator
Registration of SIM, proportionate KYC, trnxlimits
Monitoring and oversight
Agent float management
Effective operational/ICT security controls
Insolvency Consumer funds/trust A/c
Risk Mitigation Measures
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MFS Experiences in Tanzania
Pushing MFS to the next level in Tanzania
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MFS Experiences in Tanzania
• Interoperability Private sector initiative: Considering value propositions Currently the interoperability project is in good progress: BOT approved,
facilitated by neutral party IFC/BMGF involve MNOs and key banks• Partnerships and cooperation
Extension of services beyond P2P to micro insurance, NGOs links (forloans management)
• Government Uptake of Usage of MFS Revenue payments (Licenses and small taxes)
• Enabling legal and regulatory environment Bank’s supports market development and encourage innovation Proportionate regulation
• Adoption of MFS in National Financial Inclusion Framework MFS nationally adopted as one of the key-enablers to increase financial
Inclusion
Next level MFS in Tanzania
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MFS Experiences in Tanzania
Lesson for Africa: Key Take Homes
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MFS Experiences in Tanzania
• Create an enabling legal and regulatory environment Supports market development and encourage innovation Proportionate regulation
• Partnerships and cooperation Partner with Telco Regulator Encourage market cooperation (non-banks and banks)
• Government Uptake of Usage of MFS Revenue payments (Licenses and small taxes)
• Adoption of MFS in National Financial Inclusion Strategies Public and private sector adoption for national financial inclusion goals
• Interoperability Consider private sector initiatives enhancing or developing
interoperability
Key Lessons for Africa
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Thank You
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