For background on the Financial Inclusion Insights 2016 surveys, data, and reports please follow this link. The full 2016 Tanzania Annual Report can be found here. 

InterMedia’s Financial Inclusion Insights (FII) 2016 Tanzania Annual Report and Survey Data finds that financial inclusion, defined by FII as holding a registered account with a formal financial institution, declined from 62 percent in 2015 to 54 percent in 2016. This drop was likely driven by changes in the regulatory landscape that led to an increase in transaction costs and a decline in phone ownership as cheap unlicensed phones were deactivated. This outcome could be interpreted to highlight the elasticity of customer’s demand for mobile financial services (MFS) with respect to small changes in the cost of using a registered mobile money account.

FII data over the last four years has shown that Tanzanians’ access to formal financial services is mainly driven by the use of MFS (Figures 1 and 2). Yet, in 2016 while mobile money use and account ownership remained relatively high compared to banks and other non-bank financial institutions, users of registered mobile money accounts dropped by 8 percentage points from 61 percent in 2015 to 53 percent of the adult population.

FIGURE 1: Account access/trial

(Shown: Percentage of Tanzanian adults, by year)


FIGURE 2: Registered users

(Shown: Percentage of Tanzanian adults, by year)

In June 2016, the Tanzania Communications Regulatory Authority (TCRA) placed a ban on counterfeit mobile phones and began to switch off all “fake” phones that did not meet the equipment standards specified in the 2014 Electronic and Postal Communication Act. This was done amidst concerns that fake handsets, which cannot be traced, were increasingly being used by criminals and militants. These counterfeit phones were also considered unsafe for consumers as they were not subject to any safety tests, and could pose a health hazard for users. As of mid-June 2016, 630,000 phones had been shut down, with over 1.2 million additional deactivations expected to follow. Additionally, in July 2016, the TCRA required mobile phone companies to deactivate all improperly registered SIM cards or face steep fines. The TCRA further mandated that all consumers must register their SIM cards, using their official identification documents, through a recognized agent. These developments led to what the FII data identifies as a 15 percentage point drop in mobile phone ownership from 77 percent in 2015 to 62 percent in 2016.

This regulatory development particularly impacted already underserved populations. Groups affected the most by the drop in phone ownership were those younger than 35, those living below the poverty line, and rural residents. Individuals in these groups owned basic mobile phones, and most had just one phone per household. Many of them constituted the almost one in five Tanzanians who do not hold the necessary identification documents for registration. Once phones and SIM cards were disconnected, financial constraints and a lack of ID may have prevented them from replacing their phones and SIM cards.

This population may have also been impacted by a third regulatory development which further raised the cost of sending and withdrawing mobile money; In the 2016/2017 budget year, the Tanzanian government imposed new taxes on financial services including a 10 percent excise tax for sending and withdrawing money through mobile money transfers. Those below the poverty line who are often using mobile money only for cash-in cash-out (CICO) and P2P transfers may have simply not been able to withstand the price increases. In relation, the FII team observed that despite drops in registered use of mobile money from 2015-2016, advanced active use did not drop and rather continued to increase slightly (Figure 3). It is likely that people who lost their registered mobile money accounts and stopped using their accounts actively were not advanced users of the services but rather used mobile money only for CICO and P2P transfers and perhaps simply began using OTC services or cash instead of registered accounts.

FIGURE 3: Advanced active registered users

(Shown: Percentage of Tanzanian adults, by year)

In fact, over-all access to mobile money services remained stable through 2016 (Figure 1), likely because “disconnected users” were able to switch from registered to over-the-counter (OTC) use which does not require a registered account and rather can be accessed through mobile money agents. Indeed, the FII data shows that OTC mobile money users increased significantly in 2016 (Figure 4). Unfortunately, the increase in OTC users may slow scaling up of advanced services because mobile money agents can only enable CICO and P2P types of transactions, while advanced use requires a registered account.


In sum, FII data regarding financial inclusion in Tanzania 2016 highlights the impact of regulatory changes affecting phone ownership on digital financial inclusion. In a market where mobile money has driven account use and registration to date, these changes appear to have played a big role. Ultimately, this finding speaks to the balance policymakers must strike between competing priorities and between lowering barriers to entry for new customers while protecting individuals and businesses. Looking ahead, targeting improved phone ownership and looking to incentivize OTC users’ movement to registered accounts could help improve financial inclusion levels in Tanzania and deepen the spectrum of services available to customers. Additionally, innovations from mobile device and SIM card providers could improve accessibility of affordable phones that comply with new regulations, especially for vulnerable populations. The FII team looks forward to seeing what the data from FII 2017 will say regarding Tanzanians’ level of financial inclusion and mobile money engagement.


What recommendations for accelerating financial inclusion in Tanzania do you derive from the Data Fiinder on We’d love to hear from you!


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For more information about FII’s Research in Tanzania, please contact:

Loice Cherwon
Research Manager

Financial Inclusion Insights


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). FII produces data and analysis regarding citizens’ financial lives, attitudes, awareness and use of, access to, and advanced engagement with financial products and services. Through our qualitative and quantitative research, we aim to provide demand-side insights into consumers' financial behaviors, produce information that can guide policy interventions, and identify pathways for the poor to gain the financial tools they need to improve their economic circumstances.