Mobile Banking

By September 2013, mobile money transfer had enabled nearly 43% of Tanzania's adult population, 9.8 million people, to hold active mobile payment accounts, placing the country among the world's leaders in mobile money usage.

Mobile banking in Tanzania has emerged as a transformative channel for financial inclusion, connecting millions of previously unbanked citizens to formal payment systems through their handsets.

While only 11% of the Tanzanian adult population holds a formal bank account, 67% own a mobile phone and 86% own a SIM card, creating fertile ground for mobile-led financial services.

Mobile Banking Defined and its Tanzanian Relevance

Mobile banking is a service that allows a bank's customers to conduct financial transactions using a mobile device, typically through an app provided by the bank, and is usually available on a 24-hour basis.^[1]

Transactions include obtaining account balances and lists of latest transactions, electronic bill payments, remote check deposits, P2P payments, and funds transfers between a customer's or another's accounts.^[1]

In Tanzania, where physical bank branch penetration is limited, mobile banking has taken on an outsized social and economic role by bringing payment mechanisms within reach of low-income and remotely located populations.

Mobile banking does not handle transactions involving cash, so customers still need to visit an ATM or bank branch for cash withdrawals or deposits, a structural feature that shapes the Tanzanian agent-based ecosystem.^[1]

Financial Inclusion and Access in Tanzania

The Financial Inclusion Survey of Tanzania, conducted between September 2013 and March 2014, indicates that only 11% of the Tanzanian adult population has a formal bank account registered in their name.

The figure is lower in rural areas where only 8% have access, compared with 19% in urban areas.

At the same time, 67% own a mobile phone and 86% own a SIM card, underlining that mobile connectivity vastly outpaces traditional banking coverage.

Since launching in Tanzania in 2008, mobile money transfer technology has helped to expand access to financial services to almost half the population.

Urban Versus Rural Access

The rural-urban gap of 8% versus 19% in formal account ownership highlights where mobile channels can generate the greatest incremental impact.

Mobile banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch, a structural saving that is particularly meaningful in dispersed rural markets.^[1]

Scale of Mobile and Internet Banking Transactions

As of 31 December 2013, the value of mobile (SMS) banking transactions increased to TZS 587.06 million compared to TZS 302.14 million recorded in the previous year, an increase of 94.36%.

The value of internet banking transactions also increased to TZS 22,724.86 million from TZS 17,746.91 million reported in 2012, recording an annual growth rate of 28.05%.

The increase was attributed to a rise in the number of banking institutions offering mobile (SMS) and internet banking to 15 and 16, from 9 and 11 recorded in the previous year respectively.

By September 2013, mobile money transfer, which requires no bank account, had enabled nearly 43% of the adult population, 9.8 million people, to hold active mobile payment accounts.

Industry Perspective on the Tanzanian Market

Commenting on mobile banking, Mr. Joseph Carasso, Managing Director of CITI Bank Tanzania, explained that mobile banking is a very fascinating area, and one that Citi has taken very seriously from the beginning.

He noted that in East Africa this service has an important social role, enabling financial inclusion and allowing lower income and remotely located individuals access to payment mechanisms at low cost.

He added that a bank is more than just a payment mechanism, and that areas like investment banking and trade finance have little common ground with mobile banking as delivered today through telecom companies.

The perspective underscores that mobile banking in Tanzania is complementary to, rather than a substitute for, the broader banking value chain.

Investment Opportunities in Tanzanian Mobile Banking

The gap between 67% mobile phone ownership and 11% formal bank account ownership signals a large addressable market for investors deploying app-based, SMS-based, and USSD-based banking products in Tanzania.

Rural coverage, where only 8% of adults hold formal accounts, offers scope for agent networks, micro-savings, micro-credit, and remote deposit capabilities anchored on mobile channels.

The 94.36% annual growth in mobile (SMS) banking transaction value and the 28.05% growth in internet banking value point to strong momentum in digital transaction rails suitable for fintech, payment aggregation, and interoperability solutions.

With 9.8 million adults already active on mobile payment accounts, opportunities extend into value-added services such as bill payments, P2P remittances, merchant payments, and integration between wallets and formal bank accounts.

Investors can also target adjacent segments, including cybersecurity, KYC and identity solutions, agent management platforms, and cross-border remittance corridors linked to East Africa's mobile-first financial ecosystem.

Last Update: July 2026

References

1. http://www.federalreserve.gov/econresdata/mobile-device-report-201203.pdf