Tanzania Fintech Ecosystem and regulation

Fintech Ecosystem 

Tanzania has seen tremendous growth in the number of local and international Fintech startups with an average internet penetration of 46% in March 2021. There are currently 33 Fintech startups in the country, of which 67% are in an initial stage having launched after 2016. The main Fintech verticals are lending and payments. There is also a growing group of investment players based in Tanzania, including individuals and companies. (African Business, 2021)

In addition, the accessibility of financial services increased from 45% to 86% at the national level, while it reached 78% for those living in rural areas. There has also been steady growth in active mobile wallets, reaching over 21 million, which are held by 16.6 million Tanzanian adults, as reported by FinScope Tanzania for 2017. (African Business, 2021)

Plus, The United Nations Capital Development Fund (UNCDF) is currently implementing in Tanzania a Fintech Ecosystem Acceleration program that aims to build Fintech startups and accelerators by offering a range of customized services. (FundsforNGOs, 2021)

Tanzania Regulation

Given the growing number of technological financial solutions, the government and the central bank have begun to take regulatory measures to the ecosystem.

For example in the case of payment solutions the government has now established the Government Electronic Payment Gateway (GEPG), which allows different government authorities to accept payments from MNOs’ mobile money services. (African Business, 2021)

Also, the Bank of Tanzania and TCRA have a memorandum of understanding regarding supervision and monitoring of mobile money services. To provide mobile money services, a mobile network operator must form a nearly wholly owned subsidiary company. This subsidiary company will take over the mobile money business of the incumbent telecom / mobile network operator. (UNCDF, 2021)

In terms of lending, regulation is still in its early stages, but with recent growth news is expected sooner rather than later.

Lending Fintech

Among the most innovative Tanzania Fintech focused on lending we can find Rapid Cash, which provides instant loans to salaried workers and reputable entrepreneurs in Dar Es Salaam. They have over +20 successful projects and there are over 6 products: Financial investment, personal loans, local purchase order, group loans, facility loan and 1 month loans. (Rapid cash, 2021)

Microfinance in Tanzania 

Tunakopesha Limited is a non banking microfinance institution that facilitates credit for those in the low income bracket to enrich their quality of life. It was founded in 1992 and provides individual loans for salaried employees, group loans as well as business loans for small and medium enterprises. It operates through 54 branches in 25 regions across the country.