Financial inclusion crucial for sustainable economy

The government has reiterated its commitment to financial inclusion in a bid to mobilise domestic savings which are crucial for economic development.

Apart from putting financial inclusion in place, it has also liberalised the banking sector as a way of opening the door for bringing those left out to financial sector, said the Minister of State, Prime Minister’s Office (Investment and Empowerment), Eng. Christopher Chiza (pictured). He said after liberalisation there are 55 banks currently operating in the country.

“There are still many challenges, but the government is in full support of the financial services providers on financial inclusion at all fronts,” Eng. Chiza, who represented a chief guest Prime Minster, said yesterday.

The minister advised the 21st World Saving Bank Institute (WSBI) for Africa Chapter delegates to embrace technology advancement as a way of overcoming some challenges on deepening financial services.

“Use technology (advancement) on tackling the challenges of bringing unbankable society to the bank platform,” Eng. Chiza told the participants of WSBI who will dwell on the next Frontier in Accessing Financial Services for two days.

Deputy Minister for Finance, Adam Malima said saving and retail banks are playing a crucial role on mobilising deposits from the masses, who the big players are ignoring.

“We (at Treasury) are continuing with our commitment for full support to financial inclusion,” Mr Malima said, “big players are ignoring the sector which in return is an opportunity for saving and retailing banks.”

The WSBI Managing Director, Mr Chris de Noose, said overall the financial inclusion in Africa is between 5 and 15 per cent which is still low compared to other continents. “Africa should mobilise domestic saving instead of depending on foreign direct investments and foreign deposits,” Mr De Noose said.

The MD said in Tanzania the financial inclusion is on the right track compared to many other Africa countries. Despite all challenges facing saving and retail banks in Africa, the continent is developing fast - an opportunity for WSBI members. 

The Tanzania Postal Bank (TPB) which hosted the 21st meeting show cased its success and achievement in the last five years to some 25 banks worldwide.

TBP Chief Executive Officer, Mr Sabasaba Moshingi, said “there is an accrual role of digitalisation and other innovative technologies in driving and reshaping the service offer of savings and retail banks in Africa.”

The aim of the meeting, where Tanzania has four members - NMB, DCB, Azania Bancorp and TPB - aims to enable banks from member states to discuss important issues and tackle various challenges facing members in Africa.

The CEO said the meeting will be the country’s big opportunity especially at the time banking penetration in terms of savings is still very low. 

In total - bank accounts and mobile money - have pushed inclusion to 55 per cent, financial penetration, excluding mobile banking, is still 14 per cent way behind 23 per cent of the recommended rate for Sub- Sahara Africa.

WSBI was established in 1925. Worldwide it has presence in 77 countries. In Africa, WSBI has 43 members in 28 countries. 

These challenges include institutional form adapted to the market, profitability or sustainability, high cost of innovation tools and weak capitalisation, high cost of borrowing and lack of adequate human capital.

The last WSBI meeting was held in Cote d’Ivoire and in East Africa region Kenya and Uganda institutions will attend. Others are Asia, Europe and America.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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