Led by growth in registered users of mobile money, financial inclusion expanded to 65% of adults (aged 15+) in Tanzania in 2018. The 2018 benchmark exceeded the previous high of 62% reached in 2015, according to the latest findings from InterMedia’s Financial Inclusion Insights (FII) tracker survey (see figure below). The survey found strong annual growth in mobile money, as registered users rose from 55% of adults in 2017 to 63% in 2018. Financial inclusion via bank and nonbank financial institution accounts also increased in 2018 compared to the previous year. The survey data was collected in October 2018 from a nationally representative sample of 1,000 adults (ages 15+).

The findings show that growth of the mobile money customer base resumed in 2018 after a period of consolidation in 2016-2017. This consolidation took place as the market adjusted to stronger regulatory enforcement of SIM card registration, the deactivation of 1.7 million counterfeit mobile phones, and taxes that raised transaction costs on mobile money transfers in 2016.

The gender gap in financial inclusion shrank to 10 percentage points – 70% of men were financially included in 2018, versus 60% of women. The drop in financial inclusion after 2015 disproportionately affected women, and the gender gap reached 19 percentage points in 2016. The 2018 rebound in mobile money was strongest among women, driving growth in financial inclusion among women to 60% from 50% in 2017.

Compared to 2017, all the key indicators tracked by the FII program showed statistically significant increases in 2018. Growth in the broad indicator of access to mobile money was particularly marked, 80% of adults said they had ever used the service of at least one of the mobile money providers, up from 62% in 2017. Unregistered users, who rely on agents for using mobile money over the counter, increased from 13% to 17% of adults in 2017-2018.  

Phone ownership increased by 7 percentage points over 2017, reaching 71% of adults in 2018. Along with the increase in phone ownership came a decrease in users of borrowed or shared phones, which dropped from 19% of adults in 2017 to 16% in 2018. Despite the increase over the past year, phone ownership remained less prevalent than in 2015, when 77% of adults reported owning a mobile phone.

Active users (used their account in the past 90 days) increased by 9 percentage points, from 43% of adults in 2017 to 52% in 2018. The prevalence of active users, however, remains slightly below the high point of 54% of adults seen in 2015. The growth in active users was lowest among the adults who live below the poverty line of $2.50/day. Only 45% of below-poverty adults were active users of mobile money in 2018, compared to 49% in 2017. This finding suggests that the cost of mobile money transactions, which increased in 2016 because of new taxes, remains a barrier to active use among the poor.

Finally, the market continued to deepen as 9% more of the adult population became advanced users. The advanced user group engaged in account activities beyond person-to-person transfers and cash deposits and withdrawals. Advanced activities include saving, borrowing, receiving wages, paying bills, paying merchants, and other payments. The advanced user group was the most resilient to market shocks in 2016. It regained its 2015 level of 29% of the adult population in 2017, and grew to 38% of adults in 2018.

Tanzania’s market for digital financial services has rebounded strongly after its 2016-2017 consolidation phase. Increases in mobile money and bank customers, and their deepening engagement in advanced financial activities, suggests that growth is likely to continue as more of the female and below-poverty population adopt digital financial services.

If you are interested in seeing additional information about the factors that affect financial inclusion in Tanzania, please contact Samuel Schueth, Program Lead, Financial Inclusion Insights, schueths@intermedia.org.

Financial Inclusion Insights is an ongoing research program funded by the Bill & Melinda Gates Foundation and designed to build meaningful knowledge about how the financial landscape is changing across eight countries in Africa and Asia (Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda).