Tanzania: 47% of GDP Transferred in Mobile Money Revolution
Dar es Salaam — When Vodacom introduced the mobile money transfer service, M-Pesa, in 2008 financial inclusion in the country was below 16 per cent. Only eight years later, financial inclusion increased fivefold to reach 86 per cent putting Tanzania well ahead of most Sub-Saharan African countries.
All this is because of the mobile money revolution that has seen Sh43 trillion being transferred through mobile phones annually — equivalent to 47 per cent of the gross domestic product.
Reasons for mobile money revolution
Just in a decade mobile money has surpassed the small network laid by banks to include the vast majority of poor Tanzanians to the wider financial circle. The changes have enabled families to share the little they have in a fraction of seconds, no matter the distance separates them.
According to a World Bank report titled ‘Tanzania Economic Update, Money Within Reach; Extending Financial Inclusion’ released last week a number of reasons are behind the rapid growth of mobile money in the country. Mobile money has helped bridge the vast distances among people, enabling much lower thresholds for profitable service provision, enhancing convenience of service, and reducing delivery times.
Mobile money also enables people to make payments for services such as electricity and make international money transfers. Since the service became popular it resulted in stiff competition among mobile network operators (MNOs) and that helped reduce the cost of money transfers.