promoting financial inclusion with mobile phone financial ... · 11/6/2013 · promoting financial...

Promoting Financial Inclusion with Mobile Phone Financial Service: Tanzania’s Case

November 6, 2013

Kennedy Komba, Advisor, Payment Systems, Bank of Tanzania

Promoting Financial Inclusion with Mobile Financial Service in Tanzania

Outline• Financial Inclusion Landscape in Tanzania

• Pre MFS PeriodP t MFS P i d• Post MFS Period

• Role of Regulatory Framework in MFS • Permissible Models• Permissible Models• Regulators• Regulatory Approachg y pp

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Pre MFS PeriodAccess Dimension‐ Banking Sector

Tanzania Financial Inclusion Landscape

Pre MFS Period before 2008

• Bank branches/agencies 393• Serving 22 Million Adults• Access to banks 12% of Adults (2006 Finscope)• Access to banks 12% of Adults (2006 Finscope)• 36 banking institutions

• ATMs 917 concentrated in urban areas • POS 1978 in urban and touristic areas• Internet banking 2% internet penetration

9.1% Access formal financial institutions • Predominately cash transactions9.1% Access formal financial institutions37.2% Informal financial institutions53.7% Excluded from financial servicesof Adult population (2006 Finscope):

Predominately cash transactions• Limited electronic payments only based on interbank

transaction

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Post MFS Period Access Dimension‐Banking Sector


2009‐ 2013 (sept)• Bank branches/agencies 500• Serving 22 Million Adults• Access to banks 12% of Adults (2006 Finscope)• Access to banks 12% of Adults (2006 Finscope)• 50 banking institutions

• ATMs 1,452 concentrated in urban areas • POS 2,544 in urban and touristic areas • Internet banking: 6% internet penetration• Agent banking: 4 banks • Mobile banking

17% Access formal financial institutions

Source: FSDT, 2012 GIS Census of Cash outlets

17% Access formal financial institutions (WB, 2012)31.6% Informal financial institutions (2009, Finscope)56.0% Excluded (2009 Finscope):

• Cash transactions complemented with electronic transaction via mobile banking

• Access to banked customers

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56.0% Excluded (2009 Finscope):


P t MFS P i dAccess Dimension‐Mobile Financial Service: Non‐bank led


Post MFS Period 2009‐2013 (sept) • Mobile Money agents (134,158 (Sep 13) out number

financial institution’s access points and branches ( serve 40% of the population and occupying 19% of the

AGENTS

p p py glandmass)

• Compared to bank presence including ATMs and MFI serve only 12% of population (FSDT, 2012 GIS Census of Cash outlets))

• Mobile Money Subscribers 30.3 Million (Accounts) or 90% of Adults (September 2013)

• Active Users of Mobile Money 9 9 Million or 43%• Active Users of Mobile Money 9,9 Million or 43% of Adults (September 2013)

• Increased Access of financial services to unbankedIncreased Access of financial services to unbanked• Increased formal institutions to leverage on the

technology• Improved welfare: livelihood and productivity

Source: FSDT, 2012 GIS Census of Cash outlets Impact

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Tanzania MFS TrendsAccess Trends

Registered Accounts Percentage to Adult Population 2008‐Aug2013 Regulatory Issues-

• Consumer protection

80%

90%Adults : 22.5 Millions

• Consumer protection • Protection of consumer fund• Risk mitigation measures• AML/CFT use of tired approach on limits

and KYC

47%

and KYC• Understanding the spread (FI-catalytic

role of regulator)

18%

47%

2008 2009 2010 2011 2012 Aug‐13

0%8%

18%

2008 2009 2010 2011 2012 ago/13

2008 2009 2010 2011 2012 Aug 13RegisteredAccounts 0.0 1.7 3.6 10.3 17.9 20.4

Totals in Millions

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2008 2009 2010 2011 2012 ago/13


Tanzania MFS TrendsUsage Trends

Regulatory Issues-42%

Active accounts (90 days usage) Percentage of Adult Population 2008‐Aug 2013

g y• Consumer protection • Protection of consumer fund• Risk mitigation measures• AML/CFT use of tired approach on limits

35%Adults : 22.5 Millions

ppand KYC

• Understanding the spread (FI-catalytic role of regulator)

16%

0%2%

5%

0%2008 2009 2010 2011 2012 ago/13 2008 2009 2010 2011 2012 Aug‐13

Active accounts 0.0 0.4 1.0 3.6 7.9 9.6Totals in Millions

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Permissible ModelsCentral Bank Mandated to approve the Models

• Permissible Model(s)• Bank led, Non-bank led

Banks M‐banking

Non‐banks M‐Payments

pp

Regulatory issues• Approval/licensing • Regulatory jurisdiction/cooperation• E-money issuance• Protection of consumer funds• Interoperability• Agent management

Service: P2P (remittance), P2B (billpayements, loan repayments etc), B2P(salaries, loan disbursements etc), P2G (taxes),

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Regulators• Financial services• Consumer

protection on• Infrastructure• Value added services

BOT TCRAprotection on financial services

Value added services• Consumer protection on

voice and data services

Cooperate on oversight and consumer protection

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Regulatory Approaches“Test and Monitor” “Mandate and Monitor”

BoT Act 2006 MFS Regulations Guidelines and•BoT Act, 2006, Guidelines and CircularsRegulatory compliance-N bj ti ( l)

BoT Act, 2006, MFS Regulations, Guidelines and Circulars, The Electronic And Postal Communications (Consumer Protection) Regulations, 2011, Tanzania Communication Regulatory RegulationsR l t li•No-objection (approval)

•VAS license (TCRA)•Risk management plansP t ti

Regulatory compliance-•License and approval +•VAS license (TCRA)•Risk management plans +P t ti•Presentations

•Consumer protection framework•Trust A/c management•E money issuance

•Presentations•Consumer protection +•Trust A/c management +•E-money issuance +R ti / i ht•E-money issuance

•Reporting/oversight•Agent management•AML/CFT

•Reporting/oversight +•Agent management +•AML/CFT +•Permissible services +ICT ili•AML/CFT

•ICT resilience•Pricing structure

•ICT resilience•Agent management +•Pricing structure•GovernanceP lti +

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•Penalties +

ObrigadoObrigadoObrigadoObrigado

Kennedy Komba kjkomba@bot go tzKennedy KombaAdvisor, Payment SystemsBank of Tanzania

[email protected]

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promoting financial inclusion with mobile phone financial ... · 11/6/2013 · promoting financial...

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