Page 8 - Tanzania-Enabling-Mobile-Money-Policies
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enaBLinG moBiLe moneY PoLiCieS in tanZania








Introduction









T he national Payment System directorate (nPSd) at the Bank of tanzania (Bot) began its mobile money regulatory journey in

2008, when a visit from one of the country’s mobile network operators (mnos) introduced the idea that a simple mobile handset
could do much more than make calls. From this first meeting, the Bot was keen to engage with the mobile industry to learn
more about the potential of digital financial inclusion – a new and unfamiliar topic to the Bank.

Seeking to enable digital financial inclusion, but lacking national payment systems legislation to issue regulations, the Bot elected to
take an interim step. it issued ‘letters of no objection’ to the partner banks of vodacom’s m-PeSa and Zantel’s Z-Pesa (relaunched in
1
2012 as “ezy Pesa”), allowing them to launch in 2008. two more deployments followed: Zain’s Zap in 2009 and tigo Pesa in 2010. as
the market has continued to develop, the Bot has made concerted efforts to find a legal and regulatory framework that would provide
sufficient legal certainty and consistency to support a stable mobile money market, promote financial inclusion, and protect customers. a
draft regulation that allows both banks and non-banks to provide mobile payment services has gone through two iterations and will soon
be adopted. meanwhile, the Bot has taken the lead in developing a national Financial inclusion Framework (nFiF) that articulates the
role of mobile money as a key enabler of financial inclusion (see Box 1).

today, tanzania is a mobile money and digital financial inclusion success story:
• in december 2013 there were more than 11 million active mobile money accounts and approximately 153,369 agents in tanzania
across four deployments. 2
• in the same month, mobile money deployments performed transactions worth more than tZS 3 trillion (US$1.8 billion). the number
and value of transactions is growing very fast, and today the tanzania market is performing close to Kenya (see Figure 1).
• 35% of households in t anzania have at least one mobile money user; 33% of households have at least one registered mobile money user. 3

the market for mobile money in tanzania is dynamic and the four providers are highly competitive. the Bot remains actively involved
in shaping the market through prospective regulation and guidance on emerging issues, such as interoperability and cross-border pay-
ments. this journey has produced a number of lessons for policymaking and regulatory authorities, as well as the industry.

lessons for regulators


• anticipate that a developing market will require a corresponding evolution of industry engagement and regulation.
• ‘test and learn’ safely and efficiently:
• it is possible to safely provide space for the industry to launch mobile money services under the oversight of the central
bank by establishing provisional prudential and market conduct standards, while moving towards new and more
comprehensive regulations.
• engage with providers to discuss the lessons of implementing deployments and regulatory oversight activity.
• moral suasion is effective in the relationship between the regulator and the service providers.
• request feedback from service providers on draft regulations and anticipate the need to make changes through market and outside
consultation.
• establish a direct dialogue with both the banks and the mnos that are providing the service to share your concerns, explain your
objectives, and identify cost-effective ways to implement monitoring and reporting processes.
• recognise that the market is dynamic, and strive to keep up-to-date with new developments through dialogue with the industry.




1. this is similar to the approach taken by the Central Bank of Kenya.
2. Bank of tanzania (Bot), national Payment System directorate Statistics, http://www.bot-tz.org/PaymentSystem/statistics.asp.
3. intermedia (2013), “mobile money in tanzania: Use, Barriers, and opportunities,” Washington, d.C., p. 10. available at http://www.intermedia.org/wp-content/uploads/FitS_tanzania_Fullreport_final.pdf
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