Tanzania’s telecommunications sector grew substantially in the past decade. There are now 34 million mobile phone subscribers, up from just 4 million in 2005, and more than 11 million internet users versus 1.7 million users in 2005.[1] Registered mobile money users, as reported by the Bank of Tanzania in September 2013,[2] have topped 30,342,540 people (9,856,440 are 90-day active users), and consumer recruitment efforts by providers in the past two years have surely driven that number even higher.

The upsurge in mobile money use in the Tanzanian market can be largely attributed to service providers’ eagerness to explore and address customer needs for greater customer recruitment and retention. And, providers have introduced relevant market innovations that pair with consumer needs. Until 2014, consumers mostly engaged in only basic mobile money activities such as cash-in/cash-out functions, person-to-person transfers and airtime purchases. Mobile money usage grew, and types of usage were fairly static across all users. Consumers were slow in adopting many of the available advanced functions, including savings, bill pay, borrowing and insurance, and even interoperable person-to-person transfers. InterMedia’s 2014 Financial Inclusion Insights (FII) survey in Tanzania,[3] showed a breakthrough. More active mobile money users were utilizing bill pay and savings. The increase in the use of these two advanced functions suggested that consumers were beginning to recognize and extend the products to other aspects of their financial lives, building to the desired vision for true financial inclusion.

TZ blog 11 12 2015

The use of advanced mobile money services is important for two core reasons: It provides consumers a safe and convenient way to make different types of transactions and offers increased access to credit facilities. Expanded use of advanced services can also help accelerate improvement in a person’s financial status through increased savings, access to insurance services and investments ‒ all from the convenience of the individual’s own home and in a secure digital space.

To date, there hasn’t been a spike in uptake for other advanced services such as wages or G2P remittances, loan or insurance activities and bank transfers. But financial inclusion stakeholders have and will continue to spur the growth of digital financial services in Tanzania, potentially building momentum for the use of even more advanced services. There are five broad challenges to accelerating advanced mobile money services and a commitment to addressing these issues will help Tanzanians reap the benefits of expanded use.

Government Regulatory Environment

Creating an enabling legal and regulatory environment supports development and innovation around advanced mobile money services. In August 2015, the Bank of Tanzania began updating electronic money regulations, as well as payment systems licensing and approval regulations. This commitment from the government has provided an environment that enables enhanced innovation by service providers and, hence, growing consumer uptake of mobile money services. While the government will continue to be the key enabler of the rise of mobile money, we need to continue asking ourselves, “What is next? How do we accelerate financial inclusion?” Progress toward the remaining four broad challenges can help us answer those questions.

Communication and Awareness

InterMedia’s research in Tanzania[4] shows that radio is the key source of information about mobile money services: 79 percent of active mobile money account holders reported they first heard about the services on the radio. An opportunity exists to use radio to promote advanced mobile money functions. To cut through the clutter and ensure maximum impact, the promotional and informational media content should reflect local context so as to appeal to different user segments.

In addition, mobile money agents could be engaged more in promoting the use of advanced services. Mobile money operators could give agents ‒ the primary contact points for users ‒ additional training on how to be advocates for advanced services usage. An agent’s face-to-face interaction with a consumer about the availability of services and how the consumer can benefit from them can have a greater impact on a consumer’s behavior than basic advertising or signage alone.

Consumer Safety and Protection

Trust issues could be an impediment to the adoption of the advanced services offered. FII research showed that at least half of mobile money consumers experienced service downtime in the six months prior to the survey; unauthorized fees and misinformed or poorly informed/prepared agents are also a problem, although less frequently. Service providers should publicly report on the measures they are taking to reinforce the effectiveness of data privacy and protection protocols, ensure transparency, conduct apt complaints resolution, and generally protect the users from any loss of money while using these services.

Right-sizing Product Attributes and Cost

Consumers need easy-to-understand prompts for using mobile services so they can follow them with little to no assistance. Lengthy application procedures discourage usage and also introduce potential vulnerability and confusion to a process that is already a novel concept for users. Quick and simple steps, and readily available features, make it easier for consumers to use the service (i.e., having the ability to preselect account numbers for service providers when paying bills). Operators also need to find an acceptable price point and/or subsidies, without encroaching on profits, so that cost is not a barrier to uptake. Ease of use won’t mean anything if user fees make service options prohibitive.

Partnerships and Interoperability

Partnerships between the government and other players who provide consumer services (electricity, water, education, pay TV, hospitals, insurance companies, bank and nonbank institutions, etc.) open up greater possibilities for usage (e.g., savings and loans, insurance payments and claims, investments, government payments and revenue collection). Most of these services can be managed through the use of advanced services via mobile money, but the benefits of their use need to be properly communicated to users to encourage uptake. Partnership initiatives that enhance interoperability in Tanzania will help enable usage of these advanced services.

InterMedia has just completed the third wave of the FII study in Tanzania and we are watching closely to observe market changes in the usage of advanced mobile money services among the mobile money account holders in Tanzania. An enhanced regulatory environment, improved communication and user awareness, consumer safety and protection, broad partnerships and interoperability, and right-sizing product attributes and cost are all envisaged to improve the usage of advanced mobile money services in Tanzania.


[1] Tanzania Communications Regulatory Authority (TCRA), June 2015.
[2] Latest available data.
[3] Tanzania FII Tracker survey Wave 2 (N=3,000, 15+), August-October, 2014.
[4] Ibid.