Providing secure banking services opens new windows
Only 5 per cent of the population of Tanzania use formal banking services. In a country of 42.5 million people, that means 40 million people with no bank account. The figures reflect the dire poverty in which most Tanzanians live – around 90 per cent of the population live on a dollar a day. Banks have been reluctant to invest in building branch networks when there seemed little return on the outlay.
Electronic banking is revolutionising this environment by changing the way poor people are spending what they earn by providing them with secure banking services that make their personal finances easier to manage. It is also profitable for the companies, known as microfinance institutions, which run the e-banking systems. The most popular vehicle through which customers can utilise banking services electronically is via mobile phone. The technology allows customers to check and manage their accounts, pay utility bills such as gas and electric and transfer money between accounts – either their own or someone else’s – all on their phone.