Mobile Money Could Be Better Protected and Supervised to Foster Financial Inclusion in Tanzania
In approximately five years, Tanzania has witnessed an unprecedented uptake of mobile financial services (MFS). In 2008, less than 1% of the adult population had access to mobile financial services; by 2013, 90% had access—an exponential increase.
This amazing telecoms and financial services success story is attributed to the conducive regulatory environment, which the Tanzanian government, regulatory authorities and the Bank of Tanzania envisioned in the very early days of mobile money services.
In 2006, the Bank of Tanzania Act was amended to give the Central Bank the powers to oversee and regulate the payment services of non-bank entities. This was made concrete in 2007, when the Guidelines for Electronic Payment schemes were issued—allowing Mobile Network Operators (MNOs) to offer payment services.
Tanzania’s courageous regulatory approach of “mandate and monitor” has ensured that mobile payments regulations are issued to guide the market without stifling innovation or disrupting the successful development trajectory. In this way, financial stability and financial inclusion objectives are balanced.
The market for mobile money in Tanzania is very dynamic largely as a result of the high competitiveness of the four providers. The recognition that the market is dynamic and that the regulatory authorities must keep up-to-date with any new developments through constructive dialogue with the industry augurs well for the future.
The Bank of Tanzania’s commitment to financial inclusion as a public policy objective, recognises the role of mobile money in “revolutionising the landscape of financial services”. The National Inclusion Framework (NFIF), launched in December 2013 has set priority areas for action from 2014-2015 to achieve the following targets:
• to enable robust payment platforms
• to increase the proximity of financial access points to where people live and transact
• to support robust electronic information infrastructure for individual and business profiles, credit history and collateral
• to increase the engagement of the credit reference bureau and establish and use a central collateral database
• to ensure that customers are informed and protected
In line with these developments, Tanzania is now not only the first country in the entire East African region, but also the first country in the entire world to have deployed a mobile money monitoring tool.
This is the M3 Solution, developed by the Global Voice Group (GVG). This is an extremely important step, which will give government and the regulatory authorities’ visibility on all mobile money transactions to safeguard the efficiency and safety of mobile money, to protect the mobile money market and users, and also to enable better planning of the cashless economy.
Most importantly of all, perhaps, it will also limit the risk of fraud, money laundering and the financing of terrorists.
GVG is a global company specialising in ICT and revenue-assurance solutions for governments and the different authorities in charge of the telecommunications sector and taxation.
To date GVG’s solutions have been deployed in ten emerging and developing countries where they make a significant contribution to the revenue assurance and revenue-increase of both the local and national telecommunications operators. This Group’s mobile money monitoring tool, M3, offers the tools and technology enabling regulators to oversee Mobile Money and facilitate compliance in this area.
The author is a freelance corporate writer specialising in technology and ICT news