Financial Technology in Tanzania: Assessment of Growth Drivers
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Date
2023
Authors
Macha, Deogratias Philip
Massawe, Nangi Mosses
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This paper provides an in-depth insight of existing fintech environment in Tanzania,
focusing on growth-driving and retarding factors and bringing up opportunities
for scaling up fintech solutions to a broad range of the population. The analysis is
descriptive, based on information gathered from various institutions, open data
sources and interviews from key informants in the market. The analysis incorporates
both fintech start-ups and incumbent fintech companies, including mobile money. The
findings show that most of the fintech innovations in Tanzania are in payments and
lending—driven by mobile money providers, of which most have integrated with banks
and financial institutions to facilitate delivery of banking services. Gaps have been
established in the legal framework governing nano-credit (mostly offered by mobile
money operators) and the protection of fintech innovations in nascent stage. A ‘test
and learn’ institutional set-up is also missing, making it challenging to nurture and/
or support fintech innovations from the initial stages. Although there is improvement
in support infrastructure, there is slow adoption and use of smartphones capable of
supporting most digital transactions. Also observed from the analysis is absence of
a coordination platform for fintech players. To address these challenges, the paper
recommends a review of the legal framework to accommodate new fintech innovations
and products from the market, including nano-credit; institutionalizing ‘test and learn’
approach to facilitate engagement with fintech innovators; and facilitate establishment
of a platform for coordinating fintech ecosystem, including a fintech association for
self-regulation and capacity building.
Description
Keywords
Fintech, technology, digital financial services, innovations and electronic payment