Tanzania's banking sector demonstrated robust growth and stability in 2023, with total assets rising by 17.8% to TZS 54,396 billion, driven by increased deposits, borrowings, and retained earnings. Deposits surged by 16.9% to TZS 38,076.5 billion, reflecting heightened public confidence, while pre-tax profits jumped 63.5% to TZS 1,527.9 billion, bolstered by efficient operations and a growing loan portfolio. The sector's Non-Performing Loan (NPL) ratio improved to 4.4%, indicating stronger credit management, and its liquid assets-to-demand liabilities ratio stood at 28.8%, well above the regulatory minimum. These figures highlight the sector's resilience and its pivotal role in advancing Tanzania’s economic stability and financial inclusion.

1. Asset Growth and Structure

• Total assets increased by 17.8% to TZS 54,396.0 billion from TZS 46,159.5 billion in 2022. This was primarily financed by increased deposits, borrowings, and retained earnings.
• Asset composition:
  • Loans, advances, and overdrafts: 58.9% of total assets.
  • Investments in debt securities: 16.0%.
  • Cash and balances: 15.3%.
• Earning assets accounted for 84.4% of total assets, growing by 20.3% to TZS 45,907.6 billion, highlighting effective utilization of resources in productive sectors​.

2. Liabilities and Deposits

• Total liabilities grew by 18.1% to TZS 46,316.7 billion.
• Deposits increased by 16.9% to TZS 38,076.5 billion, with local currency deposits rising by 19.3% to TZS 24,241.0 billion, reflecting increased public trust in the banking system.
• Borrowings rose by 18.5% to TZS 5,531.4 billion, further supporting growth initiatives​.

3. Profitability

• The sector's pre-tax profits surged by 63.5% to TZS 1,527.9 billion, up from TZS 934.4 billion in 2022.
• Return on Assets (ROA) increased to 4.4% from 3.4%, while Return on Equity (ROE) rose to 20.5% from 14.2%, showcasing stronger earnings performance​.

4. Capital Adequacy

• Core capital adequacy ratio: 17.7% (down slightly from 17.9% in 2022 but above the 10% minimum regulatory requirement).
• Total capital adequacy ratio: 18.4%, meeting the 12% regulatory threshold. These metrics indicate strong shock-absorbing capacity​.

5. Asset Quality

• The Non-Performing Loan (NPL) ratio improved to 4.4% from 5.8%, staying within the desired benchmark of less than 5%. This reflects improved credit risk management and effective regulatory measures​.

6. Liquidity

• Liquid assets to demand liabilities ratio: 28.8%, well above the regulatory minimum of 20%.
• Gross loans to total deposits ratio rose to 92.5%, indicating effective deposit utilization for loan issuance​.

7. Outreach and Inclusion

• The number of bank branches increased to 1,011 (from 987), and banking agents grew by 41.1% to 106,176.
• Agent banking facilitated deposits worth TZS 74,914.4 billion, reflecting a 21% growth, underscoring enhanced accessibility and inclusion​.

Key Takeaways:

The banking sector's strong asset growth, improved profitability, better asset quality, and enhanced financial inclusion initiatives underscore its pivotal role in Tanzania's economic development. Its resilience and compliance with regulatory requirements demonstrate preparedness to sustain internal and external economic pressures.

The performance of Tanzania's banking sector in 2023 with important insights about its growth, stability, and evolving role in the economy:

1. Growth and Resilience

• The sector has shown significant growth, with total assets rising by 17.8% to TZS 54,396 billion, reflecting robust expansion in banking activities.
• Profitability surged, with pre-tax profits growing by 63.5%, showcasing improved operational efficiency and revenue growth.
• The ability to absorb shocks is evident in strong capital adequacy ratios (17.7% core capital and 18.4% total capital), both well above regulatory requirements.

2. Improved Credit and Risk Management

• The reduction in the Non-Performing Loan (NPL) ratio to 4.4% (from 5.8%) highlights better loan repayment and enhanced credit risk management practices.
• Growth in earning assets (20.3%) indicates banks' continued focus on deploying resources in productive economic sectors.

3. Enhanced Financial Inclusion

• Banking access expanded significantly, with 41.1% growth in banking agents (now at 106,176) and a rise in branches to 1,011.
• Deposit transactions through agent banking increased by 21%, totaling TZS 74,914.4 billion, which demonstrates broader outreach, particularly to underserved populations.

4. Confidence in the Banking System

• The 16.9% growth in deposits to TZS 38,076.5 billion, driven by local currency deposits, indicates increasing public trust and effective deposit mobilization strategies by banks.
• Liquidity levels remained robust, with the liquid assets-to-demand liabilities ratio at 28.8%, well above the regulatory minimum of 20%, ensuring banks can meet obligations.

5. Challenges and Opportunities

• Although capital adequacy ratios slightly declined, they remain comfortably above regulatory thresholds, suggesting room for further loan growth and asset expansion.
• The high loan-to-deposit ratio (92.5%) reflects strong credit expansion but may warrant careful monitoring to avoid over-leveraging.

What It Tells Overall:

The 2023 performance highlights that Tanzania's banking sector is a critical driver of economic growth and stability. It is effectively balancing profitability with financial inclusion and risk management. The sector's resilience amid global and domestic challenges demonstrates its readiness to support Tanzania's economic goals while adapting to evolving market needs.

Tanzania's financial sector, led by the banking sub-sector, continues to drive economic growth, accounting for over 70% of the sector's total assets. In 2023, the sector demonstrated remarkable resilience and growth, with total banking assets reaching TZS 54,396 billion, a 17.8% increase from 2022. Deposits grew by 16.9% to TZS 38,076.5 billion, supported by increased public confidence and robust deposit mobilization strategies. The sector's profitability surged by 63.5%, with pre-tax profits rising to TZS 1,527.9 billion, driven by improved operational efficiency and a growing loan portfolio. Enhanced credit risk management reduced the Non-Performing Loan (NPL) ratio to 4.4%, below the regulatory benchmark of 5%. These achievements underscore the sector's stability and its pivotal role in expanding financial inclusion and supporting Tanzania's macroeconomic stability.

Financial Sector Composition

The financial sector consists of five sub-sectors:

1. Banking: Dominates with over 70% of the total financial sector assets.
2. Social Security Schemes
3. Insurance
4. Capital Markets
5. Microfinance

Banking Sub-Sector

1. Institutions:
   • Commercial Banks: 34 banks accounted for 97.3% of total banking sector assets.
   • Development Banks: 2 banks contributed 1.9% of total assets.
   • Microfinance Banks: 3 banks, with total assets at 0.4% of total.
   • Community Banks: 5 banks contributed 0.4% of total assets.
2. Performance Highlights (2023):
   • Total banking sector assets: TZS 54,396.0 billion (17.8% growth from TZS 46,159.5 billion in 2022).
   • Total loans, advances, and overdrafts: TZS 32,011.0 billion (22.7% growth from TZS 26,095.9 billion in 2022).
   • Deposits: TZS 38,076.5 billion (16.9% increase from TZS 32,584.7 billion in 2022).
   • Profitability: Sector profit increased by 63.5% to TZS 1,527.9 billion from TZS 934.4 billion in 2022.
   • Non-Performing Loan (NPL) ratio improved to 4.4% from 5.8% in 2022.
3. Capital and Liquidity:
   • Core capital adequacy ratio: 17.7% (above the 10% minimum requirement).
   • Liquid assets to demand liabilities: 28.8% (above the 20% regulatory requirement).
4. Service Delivery:
   • Banking agents increased by 41.1% to 106,176.
   • Agent banking deposit transactions: TZS 74,914.4 billion (21% growth).
   • Branches increased to 1,011 from 987 in 2022.

Non-Banking Financial Institutions (NBFIs)

1. Social Security Schemes:
   • Total assets: TZS 18,834.1 billion (investment assets grew by 5.8%).
   • Members' contributions increased by 13.4% to TZS 4,382.4 billion.
2. Microfinance Service Providers:
   • Licensed entities (Tier 2): Increased from 1,095 to 1,579.
   • Total loans disbursed: TZS 962.3 billion (18.6% growth).
3. Mortgage Finance:
   • Total assets increased slightly to TZS 255.9 billion.
   • Loan portfolio grew by 7.8% to TZS 177.5 billion.

Credit Reference System

1. Credit inquiries: 17 million, up 197.7% from 5.7 million in 2022.
2. Credit reports sold: 9.7 million, an increase of 257.6%.

Major Developments

• Issued 484 licenses for non-deposit-taking microfinance service providers (Tier 2).
• Approved mergers and revoked licenses to enhance sector stability.

The overview of Tanzania's financial sector with key insights about its structure, growth, stability, and trends:

1. Dominance of the Banking Sub-Sector

• The banking sector dominates the financial landscape, holding 70% of the total financial sector assets. This indicates its central role in the country's economic operations and financial intermediation.
• With TZS 54,396 billion in assets, the sector has shown significant growth (17.8%) from 2022, reflecting increasing economic activities, better access to financial services, and public confidence.

2. Improved Asset Quality and Stability

• A reduction in the Non-Performing Loan (NPL) ratio from 5.8% to 4.4% signals better credit risk management and stronger financial health in the banking sector.
• Capital adequacy ratios remain well above regulatory requirements, ensuring that banks are adequately capitalized to absorb shocks.

3. Expansion and Financial Inclusion

• A 41.1% increase in banking agents (to 106,176) and a growth in branch networks from 987 to 1,011 indicate a continued push for financial inclusion.
• The significant rise in agent banking transactions (deposit transactions valued at TZS 74,914.4 billion) demonstrates increasing reliance on alternative delivery channels.

4. Profitability and Efficiency Gains

• Banking sector profitability surged by 63.5%, driven by higher interest income, operational efficiency, and growth in non-interest income.
• The cost-to-income ratio improved to 50.5%, within the desired limit of 55%, indicating better operational management.

5. Role of Non-Banking Financial Institutions (NBFIs)

• NBFIs, though smaller in scale, contribute to financial services diversity. For instance:
  • Social security schemes managed TZS 18,834 billion in assets.
  • Microfinance services expanded, with Tier 2 loans rising to TZS 962.3 billion, helping to bridge gaps in credit access for smaller enterprises and individuals.
  • Mortgage financing and leasing companies, though niche, support housing and equipment financing needs.

6. Increased Use of Credit Reference Bureaux

• A 197.7% growth in credit inquiries and a 257.6% increase in credit reports sold highlight growing reliance on credit data for lending, reducing information asymmetry and improving credit underwriting.

7. Challenges and Opportunities

• While the sector is stable and growing, issues like a slight decline in total capital adequacy ratios (due to increased risk-weighted assets) and reliance on deposits for funding (loan-to-deposit ratio at 92.5%) indicate areas needing attention.
• Regional disparities in banking access (e.g., agent concentration in urban centers like Dar es Salaam) highlight the need to enhance rural penetration.

Key Takeaways:

• Resilience: Despite global challenges, the sector remains robust, supported by favorable policies and supervision.
• Growth Potential: Expansion of financial services and digital channels demonstrates untapped potential in underserved areas.
• Strategic Focus: Regulatory advancements, such as implementing Basel II & III, show a long-term commitment to aligning with international standards.

This paints a picture of a growing, inclusive, and stable financial system with areas of improvement to enhance its role in Tanzania's economic development. 

Personal remittances from Tanzanians abroad play a vital role in supporting Tanzania's secondary income, with average quarterly transfers rising from around $90 million in 2013-2016 to approximately $138-$182 million in recent years. These inflows offer economic stability by providing a reliable income source that buffers families and communities against economic fluctuations. Additionally, remittances help sustain foreign exchange reserves, contributing to currency stability and offsetting trade deficits. The steady increase in remittances reflects strong diaspora ties, presenting opportunities for policy focus on optimizing remittance channels for national development.

Figures and Averages

• Quarterly remittances from individuals abroad fluctuate, with some notable examples being $90 million to $95 million per quarter on average across certain years. For instance:
  • 2013 to 2016: The average remittances per quarter hovered around $89 million to $96 million.
  • 2017 to 2020: Slight increases saw quarterly remittances averaging $91 million to $94 million.
  • 2021 to 2023: A gradual rise was observed, with quarterly values climbing closer to $138 million to $182 million.

Percentage Trends

• Growth trend: The remittances have shown a gradual increase over the years, with a growth trend of around 3-5% per annum in the recent periods, likely due to an increased number of Tanzanians abroad and enhanced mechanisms for transferring funds back home.

Observations

1. Stable inflow: Despite fluctuations in global economic conditions, personal remittances remained a stable source of secondary income for Tanzania.
2. Significant share in Secondary Income: Remittances consistently constitute a substantial portion of the secondary income in Tanzania’s current account, highlighting the importance of expatriate earnings in supporting the domestic economy​.

The data on personal transfers from individuals abroad offers several insights into Tanzania’s economic dynamics:

1. Economic Stability through Remittances: The steady flow of remittances provides a reliable source of income, bolstering Tanzania’s balance of payments. Even in fluctuating economic conditions, remittances appear resilient, offering a buffer that can help maintain household consumption, support families, and contribute to poverty reduction.
2. Role in Foreign Exchange: Remittances contribute to Tanzania’s foreign exchange reserves. As a stable inflow of foreign currency, they help ease pressure on the Tanzanian shilling, potentially contributing to exchange rate stability.
3. Support for Secondary Income: The substantial portion of secondary income attributed to remittances underscores their importance in balancing the current account. This inflow can offset trade deficits by compensating for outflows, such as imports or debt payments, through non-trade sources.
4. Reflects Diaspora Engagement: The consistent rise in remittances suggests a strong connection between the Tanzanian diaspora and their families or communities back home. This connection could be further harnessed for economic development initiatives, such as investment in small businesses, real estate, or infrastructure.
5. Potential for Policy Focus: Given the increasing trend, the government could develop policies that facilitate and maximize the impact of remittances, like reducing transfer fees, promoting financial literacy for recipients, or creating diaspora bonds to channel funds into development projects.

Overall, these remittances signify a positive, stabilizing force within Tanzania’s economy, providing a foundation for economic resilience and an opportunity for growth and policy innovation.

The fiscal year 2023/24 marked significant growth in Tanzania's financial sector, with bank deposits increasing by 17.7% to TZS 35,544.2 billion, largely due to enhanced public confidence and innovative financial products. The Dar es Salaam Zone dominated these deposits, holding 61.7% of the total, while the Northern Zone contributed TZS 4,327.2 billion, indicating a shift towards financial activity in other regions. Bank loans surged by 21.4% to TZS 32,089.5 billion, reflecting effective policies promoting credit access for key sectors such as trade, agriculture, and manufacturing, which accounted for 71% of the loan portfolio. Meanwhile, agent banking saw a remarkable 42.6% increase in the number of agents, totaling 120,324, facilitating greater financial inclusion, particularly in rural areas. This translated to substantial rises in transactions—cash deposits increased by 27.6% to TZS 26,485.9 billion, and withdrawals rose by 32% to TZS 14,659.4 billion—demonstrating a growing engagement with formal financial services across Tanzania.

1. Bank Deposits:
   • The total deposits mobilized by banks increased by 17.7%, reaching TZS 35,544.2 billion. This growth was attributed to efforts by banks and financial institutions to introduce innovative financial products and enhance public confidence in the banking sector.
   • Dar es Salaam Zone held the largest share of deposits at 61.7% (TZS 21,706.8 billion), reflecting its central role as an economic hub.
   • Other zones, such as the Northern Zone, saw a significant increase in deposits, reaching TZS 4,327.2 billion, which accounted for 12.5% of total deposits​.
2. Bank Loans:
   • The total loans extended by banks grew by 21.4% to reach TZS 32,089.5 billion. The Bank of Tanzania's policies to support private sector credit growth and financial inclusion contributed to this increase.
   • Lending was largely directed toward personal loans, trade, agriculture, and manufacturing, which collectively comprised 71% of the total loan portfolio​.
3. Agent Banking Operations:
   • The number of bank agents rose by 42.6% to 120,324 agents, enhancing financial accessibility, especially in rural areas.
   • Transactions via agent banking also grew, with cash deposit transactions increasing by 12% to 91.4 million transactions, and cash withdrawals rising by 14.5% to 52.6 million transactions.
   • The value of cash deposits and withdrawals reached TZS 26,485.9 billion and TZS 14,659.4 billion respectively, representing a 27.6% and 32% increase from the previous year​.

The financial sector data for Tanzania in 2023/24 with important insights into the country’s economic and financial landscape:

1. Increased Financial Inclusion:
   • The rise in agent banking operations and the significant increase in the number of agents (42.6%) reflect ongoing efforts to make financial services more accessible, especially in underserved and rural areas. The growth in agent transactions, with cash deposits and withdrawals up by 27.6% and 32% respectively, suggests that more Tanzanians are engaging with formal financial services, which supports the goal of financial inclusion.
2. Economic Confidence and Trust in Banking:
   • The increase in bank deposits by 17.7% (TZS 35,544.2 billion) indicates growing public confidence in the banking system. This growth could result from successful financial literacy programs, greater access to banks, and economic stability that encourages people to save within formal institutions. Dar es Salaam’s dominance in deposits (61.7%) highlights its role as the financial center of the country, though other regions, such as the Northern Zone, are also showing notable growth.
3. Support for Private Sector Growth:
   • The expansion in bank loans by 21.4% (TZS 32,089.5 billion) demonstrates that credit is becoming more accessible to individuals and businesses. Lending to sectors like trade, agriculture, and manufacturing suggests banks are playing an active role in supporting Tanzania’s economic sectors, fostering job creation, productivity, and economic diversification.
4. Agent Banking as a Bridge to Formal Finance:
   • The growth in agent banking shows that Tanzanians are increasingly using local agents as an entry point into the financial system, bridging the gap between traditional banking and underserved populations. This trend is essential for financial inclusion in regions where banks may not have a direct presence.
5. Regional Economic Disparities:
   • Dar es Salaam’s significant share of deposits highlights economic disparities, as it maintains its position as the financial hub. However, the Northern Zone’s increase in deposits signals potential economic growth in other areas, suggesting that financial activity is spreading to regions outside the capital.
6. Policy Success in Expanding Financial Services:
   • The overall growth in deposits, loans, and agent banking transactions reflects the effectiveness of the Bank of Tanzania’s policies aimed at financial inclusion and private sector support. These developments are critical for Tanzania’s broader economic goals, as access to credit and banking services can stimulate investment, consumption, and economic resilience.

Opportunities, Challenges, and the Road to 2030

Small and Medium Enterprises (SMEs) are the backbone of Tanzania’s economy, accounting for 35% of the Gross Domestic Product (GDP) and providing 50% of national employment. The sector, which includes over 95% of the country’s businesses, spans industries such as agriculture, manufacturing, services, and construction. Despite its scale, Tanzania SMEs face systemic barriers that inhibit their growth and sustainability. This article explores the current landscape of Tanzania’s SME sector, emphasizing market dynamics, policy frameworks, and resource access.

1. Market Distribution and Sector Dynamics

SMEs are concentrated in four primary sectors:

• Agriculture: Accounts for 40% of SMEs, playing a vital role in food security and rural employment.
• Manufacturing: Covers 30%, primarily focusing on food processing, textiles, and consumer goods.
• Services: Represents 25%, encompassing retail, hospitality, and professional services.
• Construction: Holds 5%, spurred by urbanization and infrastructure development initiatives​.

This distribution reflects the sector’s diversity and potential; however, 72% of Tanzania SMEs operate informally, limiting their access to credit and government incentives. As of 2023, only 30-50% of SMEs survive past five years, highlighting the need for increased support and formalization.

2. Financial and Resource Accessibility

The financial accessibility for Tanzania SMEs remains limited, with only 20% of SMEs obtaining formal financial services. High-interest rates (17-20%) and stringent collateral requirements make traditional financing inaccessible for many, leading most SMEs to rely on personal savings. Technological resources are also unevenly distributed, with urban areas adopting digital solutions such as mobile money at higher rates than rural areas, where infrastructure and digital literacy are lagging.

Figures:

• Formal Financial Access: 20% of SMEs​.
• Mobile Money Penetration: 53%, primarily benefiting urban SMEs​.

3. Regulatory Challenges and Policy Initiatives

High compliance costs, complex tax structures, and prolonged registration procedures discourage many SMEs from formalizing. Tanzania ranks 141st on the World Bank's Ease of Doing Business Index, with 70% of SMEs reporting compliance difficulties due to multiple tax obligations and labor regulations.

Figures:

• Ease of Doing Business Ranking: 141 out of 190 countries.
• Tax Compliance Difficulty: 70% of SMEs struggle with regulatory requirements​.

4. Investment Landscape and Opportunities

High-potential sectors, including agribusiness, ICT, and tourism, present opportunities for growth. Tanzania’s agribusiness SMEs make up 40% of the sector, benefiting from regional demand and the nation’s arable land. The ICT sector is expanding, driven by rising mobile penetration and digital adoption, creating prospects for e-commerce and digital financial services. However, challenges such as inadequate infrastructure and limited financing hinder SME investment and sectoral expansion.

Figures:

• Agribusiness Sector: 40% of SMEs​.
• Projected FDI Growth: +50% with infrastructure and policy improvements by 2030​.

5. Projections for 2030 and Conclusion

If Tanzania strengthens support for SMEs, particularly through simplified regulatory frameworks, digital infrastructure, and financing options, the SME sector’s GDP contribution could reach 45% by 2030, with employment rising to 60%. Improving access to formal financing, especially in rural areas, and expanding digital infrastructure are crucial steps for empowering SMEs to drive economic resilience and sustainability.

2030 Projections:

• GDP Contribution: 45% (up from 35%).
• Employment Contribution: 60% (up from 50%)​(SME Market Landscape).

In conclusion, Tanzania’s SMEs are essential for economic stability and job creation. With targeted policies and resources, SMEs can enhance their impact on the economy, contributing to a diversified, inclusive, and resilient Tanzania by 2030.

Growth, Challenges, and Future Prospects

Introduction

The banking and finance sector in Tanzania has transformed significantly over the past two decades, with growth fueled by regulatory changes, digital innovations, and increased foreign investment. By 2023, the sector included 49 licensed banks and a growing number of microfinance institutions, collectively managing assets of TZS 43 trillion (USD 18 billion), which represents about 20% of Tanzania’s GDP. This article explores the sector's current landscape, the challenges it faces, and its projected growth through 2030.

Sector Growth and Digital Transformation

Tanzania’s financial landscape has embraced digital banking, with mobile money playing a pivotal role. From 25.8 million accounts in 2019, mobile money has surged by 116.2%, reaching over 55.8 million accounts by 2024. Monthly transactions now exceed 310.9 million, driven by platforms like M-Pesa, Tigo Pesa, and Airtel Money. Mobile banking has also greatly improved financial inclusivity, raising the rate of financial access to 70% in 2024, up from just 16% in 2009.

While financial access is extensive in urban areas (85%), it lags in rural areas at 55%, highlighting the need for further expansion efforts. Despite digital strides, many rural residents still lack sufficient banking services, with mobile banking being the only viable option for some remote regions.

Challenges Facing the Sector

1. Regulatory and Compliance Costs: Compliance, especially with anti-money laundering (AML) and capital requirements, has added over 20% to operational expenses for banks. These high costs, combined with complex regulations, can be particularly burdensome for smaller banks and microfinance institutions.
2. Rural Financial Access Gaps: Limited branch networks in rural areas make mobile banking essential, yet 30% of the population still lacks access to formal financial services. Developing alternative delivery models will be crucial to bridging this divide.
3. High Lending Rates: With loan interest rates averaging 16%, credit access is limited, especially for small and medium enterprises (SMEs), which make up 90% of Tanzania’s businesses but only 16% have formal financing. This restricts the growth potential of private businesses.

Investment Opportunities

The banking sector’s future promises numerous investment opportunities:

• Digital and Mobile Banking: Mobile money transactions are projected to exceed 10 billion by 2030, with the digital banking sector expected to grow at an annual rate of 12%. Opportunities abound for investors in fintech infrastructure to support this growth.
• SME Financing: The SME loan market is anticipated to grow by 10% annually, reflecting unmet demand in a largely underserved business segment.
• Green Financing: Driven by environmental sustainability goals, green financing for agriculture and energy projects is forecasted to grow by 15% annually, providing opportunities for investors focused on eco-friendly initiatives.

Future Outlook: Banking in Tanzania by 2030

By 2030, Tanzania’s banking sector aims to become more inclusive and competitive, with 90% of adults expected to have access to financial services. The number of mobile money accounts could reach 90 million, and microfinance institutions are projected to hold 30% of the sector’s total assets. Increased competition among banks, regulatory improvements, and enhanced digital literacy initiatives are essential to achieving this ambitious vision.

Conclusion and Recommendations

Despite its growth, Tanzania’s banking sector faces several challenges, particularly in compliance costs, financial literacy, and rural access. To achieve a more inclusive, competitive landscape, it’s crucial to streamline regulatory frameworks, promote incentives for rural financial inclusion, and invest in digital infrastructure. By addressing these challenges, Tanzania can position its banking sector as a leader in Sub-Saharan Africa, delivering on the promise of accessible and sustainable financial services for all.

The mobile money sector in Tanzania has experienced strong and continuous growth, with total transactions rising by 9% from 285.5 million in June 2024 to 310.9 million in September 2024. Major providers, including M-Pesa, Tigo Pesa, and Airtel Money, each recorded over 80 million transactions in September. Smaller players like Azam Pesa also saw significant growth, with transactions increasing from 1.8 million to 5.05 million. This growth reflects the increasing reliance on mobile money for day-to-day transactions and highlights the critical role of mobile financial services in enhancing financial inclusion across the country.

1. Number of Mobile Money Transactions:

• The total number of mobile money transactions grew significantly, with 310.9 million transactions recorded in September 2024, compared to 285.5 million in June 2024. This represents a 9% increase in the number of transactions over the three-month period.
• Breakdown of monthly transactions during the quarter:
  • July 2024: 282.9 million transactions
  • August 2024: 310.9 million transactions​.

2. Transaction Breakdown by Mobile Money Providers (September 2024):

• M-Pesa: 89.68 million transactions (up from 86.97 million in June 2024).
• Tigo Pesa: 87.92 million transactions (up from 86.97 million in June 2024).
• Airtel Money: 92.67 million transactions (up from 89.25 million in June 2024).
• Halo Pesa: 35.04 million transactions (up from 33.19 million in June 2024).
• Azam Pesa: 5.05 million transactions (up from 1.80 million in June 2024).
• T-Pesa: 0.50 million transactions​.

3. Historical Growth of Mobile Money Transactions:

• Over the past five years, mobile money transactions have increased from 3.02 billion in 2019 to 5.27 billion by 2023, showing a 19% annual growth rate.
• Despite the growth in total transactions, the average number of transactions per user has slightly decreased from 117 transactions per user in 2019 to 100 transactions per user in 2023​.

Summary:

• Mobile money transactions grew by 9% in the quarter ending September 2024, with a total of 310.9 million transactions in September alone.
• M-Pesa, Tigo Pesa, and Airtel Money remain the largest players in the market, with each recording over 80 million transactions in September 2024.
• Over the years, the volume of mobile money transactions has expanded significantly, showing the increasing reliance on mobile money services for financial transactions in Tanzania.

Numbers on mobile money transactions with key insights into the growth and usage of mobile financial services in Tanzania

The strong and continuous growth in the mobile money sector, with more people relying on mobile money for financial transactions. M-Pesa, Tigo Pesa, and Airtel Money dominate the space, but smaller players are also showing growth. The increasing number of transactions highlights the role of mobile money in enhancing financial inclusion and providing a convenient alternative to traditional banking. It shows that mobile money is a critical tool for economic empowerment and everyday financial management in Tanzania.

1. Steady Growth in Transaction Volumes:

• The 9% increase in mobile money transactions, rising from 285.5 million to 310.9 million in just three months, indicates that more people and businesses are increasingly using mobile money services for their financial activities. This growth reflects the importance of mobile money in day-to-day transactions, such as payments, transfers, and purchases.

2. Dominance of Major Players:

• M-Pesa, Tigo Pesa, and Airtel Money dominate the market, each recording over 80 million transactions in September 2024. Their combined market presence shows that Tanzanians trust these platforms for their financial needs, indicating strong brand recognition, reliability, and widespread service availability.
• The significant increase in transactions for smaller players like Azam Pesa (from 1.8 million to 5.05 million) shows that there is room for growth among newer or smaller mobile money providers, though the big three dominate most of the market.

3. Growing Financial Inclusion:

• The rise in transaction numbers suggests that more people are being included in the formal financial system through mobile money. This is particularly important in Tanzania, where access to traditional banking services can be limited, especially in rural areas. Mobile money bridges that gap, providing financial services to underserved populations.

4. Shift in Financial Behavior:

• The sustained growth in transaction volumes highlights a shift in financial behavior in Tanzania, where mobile money has become a primary method of transferring funds and conducting transactions. The convenience, accessibility, and speed of mobile money are contributing to its increasing popularity.

5. Historical Growth Indicates Long-Term Trend:

• The historical growth in mobile money transactions, from 3.02 billion in 2019 to 5.27 billion in 2023, shows that mobile money is not a temporary trend but a long-term shift in how financial transactions are conducted in Tanzania. This steady annual growth of 19% points to mobile money becoming increasingly central to the Tanzanian economy.

Source: Takwimu za Mawasiliano Robo ya mwaka inayoishia Septemba 2024

In Tanzania, mobile money services have experienced significant growth, with the number of mobile money accounts rising by 9% from 55.7 million in June 2024 to 60.8 million in September 2024. This translates to an average monthly increase of 2.3%. The volume of mobile money transactions also saw a 9% rise, from 285.5 million in June 2024 to 310.9 million in September 2024. Dominated by M-Pesa, Tigo Pesa, and Airtel Money, these three providers account for nearly 90% of the market share. This growth highlights the increasing reliance on mobile platforms for financial transactions and the strong competition driving innovations in Tanzania’s digital financial landscape.

1. Number of Mobile Money Accounts:

• The total number of mobile money accounts increased from 55.7 million (June 2024) to 60.8 million (September 2024), marking an impressive growth of 9%.
• This growth translates to a monthly average increase of 2.3% in mobile money accounts during the quarter ending September 2024.

Breakdown by Mobile Money Providers:

• M-Pesa: 22.45 million accounts in September 2024 (an increase from 21.81 million in June 2024).
• Tigo Pesa: 19.49 million accounts in September 2024 (up from 18.51 million in June 2024).
• Airtel Money: 11.43 million accounts in September 2024 (up from 11.32 million in June 2024).
• Halo Pesa: 5.09 million accounts in September 2024 (up from 4.91 million in June 2024).
• Azam Pesa: 0.89 million accounts in September 2024 (up from 0.83 million in June 2024).
• T-Pesa: 1.45 million accounts in September 2024 (up from 1.44 million in June 2024).

This data shows that M-Pesa, Tigo Pesa, and Airtel Money dominate the mobile money market, together accounting for 89% of the total mobile money accounts in the country​.

2. Idadi ya Miamala ya Pesa Mtandao (Number of Mobile Money Transactions):

• The total number of mobile money transactions also experienced a rise, with 310.9 million transactions in September 2024 compared to 285.5 million in June 2024, representing a 9% increase.
• Monthly breakdown of transactions during the quarter ending September 2024:
  • July 2024: 282.9 million transactions
  • August 2024: 310.9 million transactions​

Breakdown by Mobile Money Providers:

• M-Pesa: 89.68 million transactions in September 2024 (an increase from 86.97 million in June 2024).
• Tigo Pesa: 87.92 million transactions in September 2024 (up from 86.97 million in June 2024).
• Airtel Money: 92.67 million transactions in September 2024 (up from 89.25 million in June 2024).
• Halo Pesa: 35.04 million transactions in September 2024 (up from 33.19 million in June 2024).
• Azam Pesa: 5.05 million transactions in September 2024 (up from 1.80 million in June 2024).
• T-Pesa: 0.50 million transactions in September 2024​.

3. Historical Growth in Mobile Money Transactions:

• Over the past five years, the mobile money market has shown significant growth in transactions. The number of transactions increased from 3.02 billion in 2019 to 5.27 billion by 2023, representing an annual growth rate of 19%​.
• The average number of transactions per user, however, declined slightly from 117 transactions per user in 2019 to 100 transactions per user in 2023​.

4. Market Share:

• M-Pesa continues to dominate the mobile money market with a 36.9% market share, followed by Tigo Pesa with 32.1%, and Airtel Money with 18.8%​.
• Other providers, like Halo Pesa, Azam Pesa, and T-Pesa, make up the remaining 11%, indicating a highly competitive landscape but with clear leaders​.

Summary:

• Strong Growth: The mobile money market in Tanzania is growing rapidly, with both the number of accounts and transactions rising by 9% between June and September 2024.
• Market Dominance: M-Pesa, Tigo Pesa, and Airtel Money dominate the market, controlling nearly 90% of the market share.
• Historical Growth: Over the last five years, the number of mobile money transactions has almost doubled, reflecting the increasing use of digital financial services across Tanzania.

Mobile money services with insights about the digital financial landscape in Tanzania:

Mobile money has become central to financial inclusion efforts, providing accessible financial services to millions who might otherwise be unbanked. The strong competition among key providers ensures that consumers continue to benefit from innovative, efficient, and increasingly affordable services. Mobile money is driving not just digital finance but also broader economic growth, especially as more people and businesses engage in digital transactions.

1. Rapid Adoption and Growth:

• The growth in the number of mobile money accounts from 55.7 million to 60.8 million (a 9% increase) in just three months shows the widespread adoption of mobile financial services. This indicates that Tanzanians are increasingly turning to mobile platforms for everyday financial activities like transfers, bill payments, and savings.

2. Mobile Money as a Key Financial Service:

• With 310.9 million mobile money transactions in September 2024 alone, mobile money has become an essential part of the financial system in Tanzania. This volume of transactions indicates that mobile money is a primary method for many people to conduct financial transactions, both in urban and rural areas.

3. Dominance of Major Providers:

• M-Pesa, Tigo Pesa, and Airtel Money dominate the market, holding nearly 90% of the total market share. This indicates a high level of competition among these major players, which likely benefits consumers by offering competitive rates, better services, and innovative products. The dominance of these three providers also suggests that they have built a strong trust and user base over time.

4. Growing Inclusivity in Financial Services:

• The increase in mobile money accounts and transactions shows that digital financial services are playing a key role in financial inclusion. Individuals who may not have access to traditional banking services can easily access mobile money services, allowing them to participate in the economy and handle their finances more efficiently.

5. Competition Among Providers:

• M-Pesa remains the largest provider with a 36.9% market share, but Tigo Pesa (32.1%) and Airtel Money (18.8%) are also significant players, meaning no single company monopolizes the market. This competition ensures that providers are likely to continue improving their services, offering better pricing and convenience to users to maintain or increase their market share.

6. Increasing Transaction Volumes:

• The steady increase in the number of transactions, growing from 285.5 million in June 2024 to 310.9 million in September 2024, highlights that users are not only signing up for mobile money services but also actively using them. This rise shows a deeper integration of mobile money into everyday life, from sending money to family and friends to making business payments.

7. Digital Finance as an Economic Driver:

• Mobile money has become a major driver of the Tanzanian economy. The rise in transactions and accounts suggests that businesses, individuals, and government entities are increasingly relying on mobile money to facilitate commerce, pay salaries, and provide financial services in both urban and rural areas.

Source: Takwimu za Mawasiliano Robo ya mwaka inayoishia Septemba 2024