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Impact Driven Market Facilitation

As a financial sector market faciliator with over 20 years of engagement in the market, FSDT has achieved an impressive track record of convening public and private sector stakeholders to touch the lives of almost 20 million people in Tanzania.

Since establishment in 2004, our programs have enabled some of the most econonomically marginalized and financially excluded Tanzanians to access and use financial services relevant to their needs such as insurance, savings, loans, payments and more. This has facilitated them not only to cover important expenses such as education, medical and living expenses, but also to invest in their small businesses and farms. Through FSDT’s programs, millions have been enabled to increase their incomes and improve their livelihoods andwellbeing.

FSDT has played a leading role in gathering evidence of financial inclusion and exclusion, as well as market trends and insights to inform the public and private sectors. We have also repeatedly facilitated dialogue between key stakeholders, catalysed development of financial solutions, infrastructure and policies to enable many underserved Tanzanians to benefit from regular use of financial services.

Over the years, FSDT’s facilitation has brought about the following impact in the market:

Life for smallholder farmers can be challengeing as they struggle to make a living in a fragmented agricultural sector where inputs are expensive and crop values hinge on global prices.

Financial service providers (FSPs) typically consider smallholder farmers high risk because of their low income, the seasonal nature of their profits and the fact they live in remote rural areas. FSDT worked with Agricultural Marketing Cooperative Societies (AMCOS) on the Mfumo Jumuishi initiative which connected farmers with banks, microfinance institutions, mobile money providers and insurance companies. This led to these FSPs developing financial solutions which have enhanced the lives of more than 800,000 smallholder farmers. The initiative has also enabled farmers to open formal bank accounts and access credit, increasing their yields by being able to buy fertilizers and equipment.

Women, particularly those living in rural areas, are among the most financially vulnerable and yet traditionally they are responsible for supporting children and older people.

FSDT facilitates the development of financial services and products that can meet the specific needs of women. One such solution was the digitization of Government-to-People (G2P) payments under the TASAF program. The G2P project positively impacted almost 100,000 women who now receive their payments digitally. This has made transactions safer and saved them time and money, offering them a way out of poverty. The digital nature of the TASAF cash transfer has also provided women with access to digital loans.

An unregulated and informal financial sector endangers people, particularly those who are on low incomes (most of them women), because there is no consumer protection when things go wrong.

FSDT facilitated the Ministry of Finance and the Bank of Tanzania to regulate the microfinance subsector. Through the Microfinance Act 2018 and Microfinance Regulations 2019, more than 20,000 community microfinance groups, 652 microfinance institutions, moneylenders, and 580 savings and credit cooperative societies have been formalised. This has benefitted over 403,000 Tanzanians, with around 78% being women. 

Supporting Financial Sector Infrastructure Development

Women and youth MSMEs and farmers’ access and usage of financial services in Tanzania is limited due to several reason, including lack of interoperability between merchants points-of-sale and digital wallets.

FSDT worked closely with the National Payments Directorate at the Bank of Tanzania to facilitate the development of the Tanzania Instant Payment System (TIPS), an interoperable digital payment platform that allows for real-time transfers of money between different FSPs in Tanzania, including banks, mobile money operators, and other authorized institutions. It provides widespread accessibility to financial services, simplifying the process of making payments and concluding financial transactions by eliminating the need for multiple accounts or platforms. With a unified infrastructure for all FSPs helps to lower transaction costs. To date there have been over XXXX transactions completed via TIPS.

People in rural areas struggle to escape generational poverty because they lack financial literacy, assets for collateral and identity documents needed to open bank accounts.

FSDT has collaborated with partners including CARE Tanzania, Aga Khan Foundation, and WAMA Foundation to extend financial services to rural areas using village savings and loan associations.  Through initiatives such as Ongeza Akiba, Boresha Maisha and  Pesa Kwa Wote more than 500,000 people – most of them women — have benefitted from the mobilization of around $20 million of their own savings. The savings groups have been able to provide loans to their members to cover vital costs such as education and hospital expenses, as well as empower them to make investments in their own businesses and farms.

Youth, women, smallholder farming households, and small and micro-business entrepreneurs often lack financial services because they live in areas which lack access to bank branches.

FSDT has worked with CRDB Bank and Equity Bank to extend the reach of their financial services. The partnership with CRDB led to the establishment of 441 savings and credit cooperative societies, serving almost 680,000 people, and mobile banking branch trucks were deployed to remote areas. FSDT also collaborated with Equity Bank to leverage mobile phone technology and agency-based branchless banking to affordably extend its reach into rural areas. The project recruited over 2,000 bank agents and trained 40,000 people in financial literacy.

FinScope Tanzania provides detailed insights into the financial demand side landscape of Tanzania, including the financial behaviours, needs and current uptake and usage patterns of financial services.

In collaboration with the Ministry of Finance, Bank of Tanzania, National Bureau of Statistics, and Office of Chief Government Statistician, FSDT has been conducting FinScope surveys in Tanzania since 2006 with the most recent published in 2023. FinScope Tanzania is a comprehensive and nationally representative survey to assess and analyze the financial behavior, attitudes, and access to financial services of the country’s population. Through the insights generated from these surveys, numerous policy changes and developments have been triggerd, national financial inclusion frameworks have been designed and evaluated and data driven solutions designed.  The overall impact of FSDT’s support to financial sector development in Tanzania is evident in the progress of financial inclusion in Tanzania, with 76% of the population using formal financial services in 2023, compared to 11% in 2006.

Enabling more than half of the Tanzanian population to onboard into formal financial services.

FSDT has long recognized that people’s lack of identity documents is a key barrier to financial inclusion and has worked with the National Identification Authority (NIDA) to generate 18 million national identity numbers (NINs). The possession of a NIN means an individual can access basic services and meet the know-your-customer (KYC) requirements of financial service providers. FSDT has also supported the biometric registration of mobile money users through its participation in the Taifa Moja Campaign.

The financial sector faces several key constraints to meet demand and these include the lack of frequent and timely supply-side data as well as limited penetration of financial access points especially in rural areas.

FSDTsupported the Bank of Tanzania to develop a Financial Services Registry (FSR), a location based financial services registry. The Bank of Tanzania (BOT) designed, developed and now hoststhe system and it has also been accepted by other regulators such as TIRA, CMSA, and TCDC. This registry is expected to support FSPs to develop data driven expansion strategies, regulators with increased oversight and boost the adoption and utilization of financial services as users will be able to identify access points wherever they are located. During the establishment of the system FSDT spearheaded the nationwide registration of financial access points these access points were linked to GPS locations and assigned unique IDs, enabling financial service providers to align this data with their existing data structures and transaction records.

Credit-only microfinance institutions can only serve a limited number of customers, most of them low-income earners, because they lack the capital base and liquidity to offer a broader range of products to more people.

FSDT has supported microfinance institutions such as SEDA and FINCA, which were previously credit only group-lending institutions,  to transform into microfinance banks offering banking services, including credit, savings, money transfers, and taking deposits from the public. FSDT support involved strengthening their operations with the goal of achieving operational self-sufficiency during this transformation. SEDA has become Vision Fund Tanzania Microfinance Bank. It emphasises impact-lending and provides credit to low-income women and youth, medium- and long-term loans to female-owned enterprises, and agricultural loans for farmers in rural areas. Vision Fund is also beginning to take deposits. FINCA Tanzania has also evolved into FINCA Microfinance Bank, expanding its reach to rural areas to serve farmers, including women and youth, who previously lacked access to financial institutions.

Financial service providers developing and scaling innovative and responsive financial solutions for women and youth can promote equality, empowerment, and wellbeing.

FSDT has catalysed innovation in the financial sector through various innovation platforms, including challenge funds and insights to solutions innovation sprints that have enabled the development and refinement of several financial solutions existing in the market today. These innovation platfroms include the SME Challenge Fund, Bima Challenge, FinDisrupt, DataDisrupt, FinSights Lab and the most current FinClinic, which in collaboration with financial service providers and others, have yieled products such as NBC Shambani, NBC Kua Nasi, NMB Mshiko Fasta, TigoPesa Dawa Mkononi and the improved Selcom DukaDirect in the market.

Improved regulatory frameworks can promote gender equality, as well as economic and financial opportunies for women and youth.

FSDT has contributed to the development of major national frameworks to shape the financial inclusion trajectory in Tanzania. These include the National Financial Inclusion Frameworks (NFIS) 2014-16, 2018-2022, 2023-2028;  National Financial Education Framework 2016-2020; Financial Sector Development Master Plan 2020/21-2029/30. These framework have guided financial sector players towards a more inclusive and transformative financial sector.

For more information on FSDT impact over the years, visit our publications below:

Summary Report

See the key findings of the study

Download the FinScope Tanzania 2023 Full Report

Download the Finscope Tanzania 2023 Datasets

Download the Zanzibar Full Report

Summary Report

See the key findings of the study

Data

Get access to the full set of data

Questionnaire

The study questionnaire is available here

Presentation

See the key findings of the study

Summary Report

See the key findings of the study

Data

Get access to the full set of data

Questionnaire

The study questionnaire is available here

Summary Report

See the key findings of the study