Tanzania Banks Allowed to Contract Agents for Banking Services

The Bank of Tanzania (BoT) recently issued regulatory guidelines allowing for agent banking by Tanzanian Banks.

From 2013 the more than 40 banks and financial institutios operating in Tanzania will be abe to contract non banking retail outlets throughout the country to deliver banking services on their behalf.

Currently only a fraction of Tanzania’s bankable population has access to bank’s branches and services.

Since Tanzanian rural population accounts for more than 70% of the 47 million country’s inhabitants and the vast majority of banks’ retail networks is concentrated on larger urban areas, the arrangement would allow to supply banking services to this large segment.

The issuing of the guidelines is part of BoT’s vision for a comprehensive financial system to grant access of quality and affordable basic banking service to the whole Tanzanian population

Tanzania’s active population already enjoyes M-PESA,the innovative mobile-phone based money transfer and microfinancing service provided by the mobile companies operating in the country.

According to BoT reports, M-Pesa services exploded in Tanzania between 2010 and 2012 reaching a monthly transaction volume of USD 48 Million in September 2012 with nine million subscribers.

BoT is currently drafting MPESA regulation requiring phone companies to partner with commercial banks to ensure that the business is carried out prudently.