Page 6 - Tanzania-Enabling-Mobile-Money-Policies
P. 6
Foreword
tanzania has witnessed unprecedented uptake of mobile financial services (mFS) in the span of five
years. after a humble beginning, when less than 1% of the adult population had access to mobile
financial services in 2008, 90% had access by September 2013 – an exponential increase. Likewise,
active usage has shown similar improvement, with 43% of the adult population actively using this
service in September 2013. these encouraging results have emerged from a conducive regulatory
environment, which we envisioned in the early days of mobile money services. our approach was
to test the deployment of the service and monitor its developments, known as the “test and learn”
approach. to facilitate this, we amended the Bank of tanzania act in 2006 to give the Central
Bank powers to oversee and regulate non-bank entities in offering payment services. in 2007 we
operationalized this by issuing Guidelines for electronic Payment Schemes, which we used to allow
mobile network operators (mnos) to offer payment services.
mFS in tanzania has subsequently become a household name and supported the Bank of tanzania’s
objective of financial inclusion. the service has enabled the unbanked population to have conveni-
ent access to payment services. in this regard, the recently launched national Financial inclusion
Framework (nFiF) recognise mFS as one of the key technologies for facilitating financial inclusion.
the Bank’s regulatory journey has not been a solo trip; we received a great deal of cooperation
from the tanzania Communications regulatory authority (tCra) as the regulatory counterpart
of the mnos that are providing mFS. the positive relationship with the tCra has enabled mFS to
thrive in the country. the Central Bank and the tCra cooperate on the oversight of the mFS regula-
tory framework.
it is also worth noting that the private sector has had a significant role in facilitating the growth
of mFS. From the beginning, mnos were required to partner with banks to receive a “letter of no
objection”, which enabled the Central Bank to ensure that consumer funds are protected in the
banking system backed with a 100% liquidity requirement. Commercial banks have since enhanced
their partnerships with the mnos and we are seeing inroads being made with second generation
mFS in tanzania.
We have learned that new technologies that augur well with the Central Bank’s objective need to
be nurtured and monitored closely to ensure they do not cause any financial instability or reputa-
tional risk that may affect the country’s payment systems. this approach has made mFS in tanzania
a success story. With the increased uptake of the services and based on the dynamics that we see
in the market, we are currently shifting the regulatory approach to a “mandate and monitor” ap-
proach, whereby mobile payments regulations will be issued to guide the market without stifling
innovation or disrupting the success we have witnessed. rather, the regulations will ensure that we
balance financial stability and financial inclusion objectives. in doing so, we will also continue to
ensure that proportionate regulation is applied to the services deployed in the market.
i thank GSma for compiling this study, which offers us the opportunity to share our experiences
with mFS with the rest of the globe.
Prof. Benno Ndulu
Governor, Bank of tanzania
Picture: World economic Forum
tanzania has witnessed unprecedented uptake of mobile financial services (mFS) in the span of five
years. after a humble beginning, when less than 1% of the adult population had access to mobile
financial services in 2008, 90% had access by September 2013 – an exponential increase. Likewise,
active usage has shown similar improvement, with 43% of the adult population actively using this
service in September 2013. these encouraging results have emerged from a conducive regulatory
environment, which we envisioned in the early days of mobile money services. our approach was
to test the deployment of the service and monitor its developments, known as the “test and learn”
approach. to facilitate this, we amended the Bank of tanzania act in 2006 to give the Central
Bank powers to oversee and regulate non-bank entities in offering payment services. in 2007 we
operationalized this by issuing Guidelines for electronic Payment Schemes, which we used to allow
mobile network operators (mnos) to offer payment services.
mFS in tanzania has subsequently become a household name and supported the Bank of tanzania’s
objective of financial inclusion. the service has enabled the unbanked population to have conveni-
ent access to payment services. in this regard, the recently launched national Financial inclusion
Framework (nFiF) recognise mFS as one of the key technologies for facilitating financial inclusion.
the Bank’s regulatory journey has not been a solo trip; we received a great deal of cooperation
from the tanzania Communications regulatory authority (tCra) as the regulatory counterpart
of the mnos that are providing mFS. the positive relationship with the tCra has enabled mFS to
thrive in the country. the Central Bank and the tCra cooperate on the oversight of the mFS regula-
tory framework.
it is also worth noting that the private sector has had a significant role in facilitating the growth
of mFS. From the beginning, mnos were required to partner with banks to receive a “letter of no
objection”, which enabled the Central Bank to ensure that consumer funds are protected in the
banking system backed with a 100% liquidity requirement. Commercial banks have since enhanced
their partnerships with the mnos and we are seeing inroads being made with second generation
mFS in tanzania.
We have learned that new technologies that augur well with the Central Bank’s objective need to
be nurtured and monitored closely to ensure they do not cause any financial instability or reputa-
tional risk that may affect the country’s payment systems. this approach has made mFS in tanzania
a success story. With the increased uptake of the services and based on the dynamics that we see
in the market, we are currently shifting the regulatory approach to a “mandate and monitor” ap-
proach, whereby mobile payments regulations will be issued to guide the market without stifling
innovation or disrupting the success we have witnessed. rather, the regulations will ensure that we
balance financial stability and financial inclusion objectives. in doing so, we will also continue to
ensure that proportionate regulation is applied to the services deployed in the market.
i thank GSma for compiling this study, which offers us the opportunity to share our experiences
with mFS with the rest of the globe.
Prof. Benno Ndulu
Governor, Bank of tanzania
Picture: World economic Forum
