The banking sector has been advised to promote the culture of saving as experts believe that “poverty stops once savings starts”.The experts are urging that banks, especially those offering retail and savings services, should make more efforts to bring the unbanked to the financial services since domestic savings are vital for people’s development.
The World Savings and Retail Banking Institute (WSBI) Chris De Noose said banks should take advantages of the advanced technology - internet and mobile platform-to bring more to financial brackets in the country.
“Effort should be made to bring people to the banking services (this include) building trust of banking system,” Mr De Noose said, “Otherwise people may continue to put their savings under the mattress.”
The WSBI chief said that in Africa on average financial inclusion is between 5 and 15 per cent despite the continent’s population of the young with a number of opportunities and business potential.
“The (Tanzania) Postal Bank is doing well... (However), government and central bank should increase education and awareness of saving (amid building) trust in financial sector,” Mr De Noose said.
The WSBI boss also suggested that since the East African region has similar culture the savings and retail banks are better off if they share knowledge, experiences and challenges of bringing people to banks.
PostBank Uganda, Managing Director, Mr Stephen Mukweli, said they collaborate a lot on sharing experiences and know how on reaching the “unbankable” population with their counterparts in Tanzania.
“We have been working together and collaborate a lot in terms of product knowledge, experiences and capacity building — sending our staff to Tanzania and theirs to Uganda.
We have been working together in developing the products,” Mr Mukweli said. Tanzania Postal Bank, like its counterpart in Uganda, has established a number of multi-channel delivery approaches-including physical branches totalling 51, ATMs and over 300 bank agents— targeting 1000 next year.
The TBP Chief Executive Officer, Mr Sabasaba Moshingi, said: “There is an accrual role of digitalisation and other innovative technologies in driving and reshaping savings and retail banks in Africa.”
In Tanzania WSBI has four members namely NMB, DCB, Azania Bancorp and TPB who joined 25 others similar institutions internationally.
The WSBI aims to enable banks meets regularly to discuss important issues and tackle various challenges facing savings in Africa and globally. “In terms of saving, we still consider mobile platform as a cash-in-cash out,” Mr Moshingi said “WSBI concern about savings.”
Though, some quarters see mobile transaction as cash-in-cash out, NMB wants to reverse the phenomenal and create a cashless society where almost all payments are done through mobile handsets.
The NMB Managing Director, Ms Ineke Bussemaker said the bank envisage to use platform to enable people to save thus do away the cash-in-cash out trend.
“If a farmer can pay all of his bills-buying fertiliser, seeds, children school fees-using mobile phone...you don’t need a cash to live,” Ms Bussemaker, an IT expert, said. Ms Bussemaker, who has an arm length of bank experience spanning to 30 years, added “(but) they must believe and trust the (mobile phone) platform.”
The NMB Chief Risk Officer, Mr Tom Borghols, said this year the bank plans to have some 250 agents banking to increase its outreach of its 163 brick and mortar branches. WSBI President for Africa Alfred Mabika said the continent has changed considerable hence savings, credits and a large volume of transaction surely push GDP up.
“The financial inclusion in our continent (or countries) will not succeed if politicians are not on our side-it depends on a (good government) leadership,” Mr Mabika, who is also head of postal bank in Gabon, said.
The financial inclusion in Africa faces a number of challenges include institutional are not 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.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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