MOSHI UNIVERSITY COLLEGE OFCO-OPERATIVE AND BUSINESS STUDIES

(MUCCoBS)

A Constituent College of Sokoine University of Agriculture

P.O Box 474, Sokoine Road, Moshi Tanzania

CHALLENGES FACING PROVIDERS AND USERS OF MOBILE COMMERCE IN

TANZANIA,

A Case of Vodacom M-Pesa In Tanga City

Noel Ernest Kimambo

Bachelor of Arts in Procurement and Supplies Management (BA-PSM)

July, 2012

i

CHALLENGES FACING PROVIDERS AND USERS OF MOBILE COMMERCE IN

TANZANIA

A CASE OF VODACOM M-PESA IN TANGA CITY

By

Noel Ernest Kimambo

A Research report submitted in Partial fulfillment of the Requirements for the award of

Bachelor of Arts in Procurement and Supplies Management of Sokoine University of

Agriculture

Moshi University College of Cooperative and Business Studies

July, 2012

ii

CERTIFICATION

The undersigned certifies that, he has read and hereby recommends for acceptance by the Moshi

University College of Cooperative and Business Studies a research report entitled,

―CHALLENGES FACING PROVIDERS AND USERS OF MOBILE COMMERCE IN

TANZANIA. For the fulfillment of the requirement for the award of Bachelor of Arts in

Procurement and Supplies Management (BA-PSM) at Sokoine University of Agriculture (SUA)

Supervisor‘s Name ……………………………………………………………

Supervisor‘s Signature …………………………………

Date...........................................

iii

DECLARATION AND COPYRIGHT

DECLARATION

I Noel Ernest Kimambo, Declare that this Research report is my original study and has not been

presented and will not be presented to any other higher learning institution for a similar or any

other academic award.

Signature …………………………………………………………..

Date ………………………………………………………………

COPYRIGHT

This research report is a copyright material protected under the Berne Convention, the Copyright

and Neighboring Right Act of 1999 and other International and national enactments, in that

behalf, on intellectual property. It may not be reproduced by any means, in full or in part, except

for short extracts in fair dealings, for research or private study, critical scholarly review or

discourse with an acknowledgement, without the written permission of the Moshi University

College of Cooperative and Business Studies on behalf of both the author and the Sokoine

University of Agriculture.

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ACKNOWLEDGEMENTS

The preparation of this work would have not been possible without the strength as well as good

health that I was given by almighty God.

I would like to make use of this opportunity to thank Management and staff of Vodacom in

Tanga City as well as agents and users of Vodacom M-Pesa and other networks such as

TigoPesa, Esy Pesa, and Airtel Money.

I would not forget to show my appreciation to Erasto Nkwabi and all my classmates and my

friends who have been hand in hand with me in data collection, and in analysis of data as well as

in other activities related in preparation of this research report.

A special word of thanks goes to my father Dr. Leonard E. Mboera, my mother Haikael E.

Mboera and my brother Jeremy E. Kimambo. Throughout my life you have been there to support

me.

Lastly, I would like to thank Dr. E. Mwende for his continuous support throughout the

formulation of proposal, data collection to report writing of the case study. His dedication to the

students of MUCCoBS is greatly appreciated.

‗‘ GOD WILL BLESS ALL OF YOU‘‘

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DEDICATION

I would like to dedicate this Research Report to my young brothers Mringi and Bariki as well as

my sister Mamkindi.

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ABSTRACT

Mobile Commerce services are provided by various companies in Tanzania. And the major

service is mobile money transfer which is provided by almost four companies including

Vodacom m-pesa, Tigo pesa, Airtel Money and Easy Pesa. The major service is Vodacom m-

pesa which was the first one to be established in Tanzania in 2009 and it has a large number of

customers (Two million customers) than any other company.

This report is trying to explore various challenges which are facing mobile commerce in

Tanzania. A researcher has developing research questions which are used as the road map for

obtaining findings.

Objectives for this research report are to explore the availability of mobile commerce in Tanga

city, to identify potential challenges in the provision and utilization of mobile commerce in, to

explore factors affecting provision and utilization of mobile commerce, and to identify strategies

used by organizations providing mobile commerce services in solving the problems.

These research objectives were chosen for the purpose of the researcher to obtain the data which

are precise. And these questions were answered through questionnaires and interviews conducted

by the Researcher.

The respondents during the data collection were users of Vodacom m-pesa, agents of Vodacom

m-pesa and the staffs of Vodacom. Challenges such as network failure due to large number of

customer above the capacity of system, cash flow problems to agents of m-pesa, double standard

problems, in adequate training to agents, anti money laundering regulations established by

central bank of Tanzania.

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Mobile commerce took place not more than three years as people still see this as a new

technology as before the introduction of this formal technology people were using other informal

methods such as transferring of value in form of kinds, also people were using buses as a means

of transferring money to their relatives.

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LIST OF ABBREVIATIONS, ACRONYMS AND SYMBOLS

CDMA Code Division Multiple Access

E-COMMERCE Electronic commerce

GPRS General Packet Radio Service

GSM Global System for Mobile Communication

M-COMMERCE Mobile commerce

M M T Mobile Money Transfer

M-PESA Mobile Pesa

NBC National Bank of Commerce

SMS Subscriber Message Servicers

TCP Transmitted Control Protocol

TCRA Tanzania Communication Regulatory Authority

WTO World Trading Organization

3G 3rd

Generations for Mobile Communication

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LIST OF FIGURES AND TABLES

LIST OF FIGURES

Fig. 1: Relationship between Variables………………………………………………..16

Fig. 2: Percentage of gender…………………………………………………………….24

Fig. 3: Percentage of activities………………………………………...............................25

Fig. 4: Percentage of Users………………………………………………………………26

LIST OF TABLES

Table 1…………………………………………………………………………………….20

Table 2……………………………………………………..................................................27

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TABLE OF CONTENTS

COVER PAGE………………………………………………………………………………..

TITLE PAGE………………………………………………………………………………….i

CERTIFICATION……………………………………………………………………………ii

DECLARATION AND COPYRIGHT……………………………………………………..iii

ACKNOWLEDGEMENTS…………………………………………………………………iv

DEDICATION………………………………………………………………………………v

ABSTRACT…………………………………………………………………………………vi

LIST OF ABBREVIATIONS, ACRONYMS & FIGURES ……………………………..viii

LIST OF FIGURES………………………………………………………………………….ix

LIST OF TABLES…………………………………………………………………………...ix

TABLE OF CONTENTS…………………………………………………………………….x

1.0 INTRODUCTION…………………………………………………………………...1

1.1 Background to the Study………………………………………………………1

1.2 Statement of the Problem………………………………………………………3

1.3 Objectives………………………………………………………………………4

1.3.1 General Objective………………………………………………...4

1.3.2 Specific Objectives…………………………………………….....4

1.4 Research Questions…………………………………………………………….4

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1.5 Scope of the Study……………………………………………………………5

1.6 Location, Population and Economy…………………………………………..5

1.7 Significance of the Study…………………………………………………….6.

1.8 Organization of the Report……………………………………………………6

1.9 Definition of Key Terms………………………………………………………7

2.0 LITERATURE REVIEW……………………………………………………………8

2.1 Theory of the Study…………………………………………………………….14

2.2 Relationship of the Variables…………………………………………………..16.

3.0 RESEARCH METHODOLOGY………………………………………….………18

3.1 Description of Study Area ……………………………………………………18

3.2 Research Design……………………………………………………………….18

3.3 Sampling……………………………………………………………………….19

3.3.1 Sampling Frame………………………………………………………..19

3.3.2 Sampling Techniques…………………………………………………..19

3.3.3 Sampling Unit………………………………………………………….19

3.3.4 Sampling Size………………………………………………………….19

3.4 Types of Data…………………………………………………………………..20

3.4.1 Primary Data…………………………………………………………..20

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3.4.2 Secondary Data…………………………………………………………20

3.5 Sources of Data…………………………………………………………………21

3.6 Procedures for Data Collection…………………………………………………21

3.7 Data Collection Techniques…………………………………………………….22

3.8 Data Analysis and Interpretation Techniques………………………………….22

3.9 Limitations to the Study……………………………………………………….22

4.0 FINDINGS AND DISCUSSION……………………………………………………23

5.0 CONCLUSIONS AND RECOMMENDATIONS…………………………………32

5.1 Conclusions……………………………….……….…………………………..32.

5.2 Recommendations……………………………………………………………..34

REFERENCES………………………………………………………………....................36

APPENDICES……………………………………………………………………..…….38

Appendix 1. Work Plan……………………………………………………………….38

Appendix 2. Budget for Research Activities……………………….………………….39

Appendix 3. Questionnaires…………………………………………………………..40

Appendix 4. Sample size Determination………………………………………………..50

Appendix 5 Tables in analysis of Data……………………..………………………51

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1.0 INTRODUCTION

1.1 Background to the Study

Mobile Commerce can be defined as ―the use of a terminal, and public mobile network to access

information and conduct transactions that result in the transfer of value in exchange for

information, services or goods.‖ Examples of this would include using a mobile phone to

purchase a camera, a movie ticket or even a new ringtone. One point of clarification to note,

however, is that m-commerce is conducted completely electronically, thus would not include

situations where an individual uses a mobile device to call a store and buy something.

(Rutherford B. (2009).

Vodacom m-pesa was launched in Tanzania in April 2008 one year after being launched in

Kenya. The services provided by Vodacom m-pesa are such as payment of electricity bills, water

bills and cable television services. Other m-commerce services on Tanzania users include buying

tickets (movies, transport), buying groceries and paying restaurant bills. There are other

companies which are providing the same services like Vodacom. Such companies are MCL

Tanzania L.td which have its product called Tigo-pesa, Airtel with Airtel money, Zantel with

Ezy-pesa, NMB Bank, CRDB Bank and Akiba Commercial Bank. .(Gunnar Camner& Emil

Sjoblom (March 2009).

Technology adoption is a main challenge as prior to the launch of M-PESA many Tanzanian

mobile phone users were familiar with the basic operations of a mobile such as texting and

making voice calls. However, only 15% of the adult population owned a mobile phone and only

another 14% had access to someone else‘s phone. Furthermore, not many users, including those

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that owned phones, were familiar with USSD which is the technology protocol that Vodacom

used to launch M-PESA. (International Finance Corporation (June 2010).

According to (Gunnar Camner& Emil Sjoblom (March 2009). Most of the people prefer to use

the traditional ways of transferring value in kind. Common goods Common goods being sent in

Tanzania are sugar, powder milk, rice, spices, clothes, medicines, building materials and

electronics. The reasons for remitting in kind is regional differences in prices and availability, the

sender knows that the goods are used for a specific purpose, also, it involves less risk than

sending money in cash. Other methods which were main challenge for the technology adoption

of m-pesa were such as sending money through buses as There are several bus companies that

offer the service of money transfers, some in more organized ways with a fixed fee where the

sender gets a receipt and a number that the recipient have to use to collect the money at another

bus office.

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1.2 Statement of the Problem

The number of mobile subscribers in Tanzania is very higher compared to the number of account

holders as only population of 4,800,000 people have banks accounts while 12,000,000 people are

active mobile subscribers. Furthermore more than half of the total population in Tanzania has

never heard of a debit card, an ATM machine or a current account. Only 9% of the population

has access to formal financial services and 54% don‘t use any form of financial services.

Initially, Vodacom did not invest a lot of resources in consumer education and this may be one of

the key reasons that the service was slow to start. Tigo as well as Airtel have also launched

similar money transfer services and their efforts to educate the general public have increased the

overall level of financial understanding in Tanzania. (International Finance Corporation (June

2010).

Tanga city is one of the largest cities in Tanzania with a population of with a roughly population

of 303,396 people with a dispersed population. This makes it difficult for operators to effectively

roll out an extensive spread of agents which are about 123 agents. The coverage area is large,

requiring more training and management resources, and the revenue per agent is lower since they

are serving a smaller base of local customers. Furthermore, with a dispersed population,

consumer education tactics such as road shows and product demos can be costly and less

effective. In 2010 there were only 12 agents while up to march 2012 there are about 123 agents.

(Vodacom Tanga office (2012).

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1.3 Objectives

1.3.1 General objective

The general objective of this research was to find out factors affecting the provision and usability

of Mobile Commerce in Tanga City. The findings identified and explained in chapter four will

help to make mobile commerce services to be beneficial to the residents of Tanga City and all

residents of Tanzania.

1.3.2 Specific objectives

i. To explore the availability of mobile commerce service in Tanga City.

ii. To identify potential challenges in the provision and utilization of mobile

technology in M-Commerce in Tanga City.

iii. To explore factors affecting the provision and utilization of M-Commerce in

Tanga City.

iv. To identify strategies used by organizations provides M-Commerce services

in solving problems.

1.4 Research Questions

i. What were the challenges facing users of M-Commerce in Tanga City?

ii. What were the factors affecting use of M-commerce services?

iii. What were the possible strategies which can be used to solve these problems?

iv. What kind of support offered by organizations which provides M-Commerce

services to their agencies and customers?

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1.5 Scope of the Study

The study covered the area of Tanga city as it included users of m-pesa, agents and staff of

Vodacom. Users and agents from four divisions of Tanga city which are Chumbageni, Ngamiani

North, Ngamiani South and Pongwe were included.

1.6 Location, Population and Economy

Tanga City is one of the eight districts in Tanga Region, north eastern Tanzania and lies in the

central eastern part of the Region and is bordered by Muheza and Pangani districts to the west

and south, Mkinga to the north, and the Indian Ocean to the east. It is situated between 5° and

5°16‘ latitudes South and 38°53‘ and 39°10‘ longitudes East. Tanga has had a pivotal role in the

history and economy of the country and gained City status in June, 2006. It is administered by

the Tanga City Council, has a land and oceanic area of 600 square kilometers and the projected

population in 2012 is approximated to be 303396 people. And the population growth is 1.88%

per year. The City of Tanga is the regional headquarters for Tanga Region as well as of the

Tanga City Council. It is also a District with its administrative structure.

Agriculture, especially sisal estates, occupies the largest proportion of the total district area. In

the urban part of Tanga City, residential areas are the most important land use followed by

agriculture; industrial activity accounts for only a tenth of the total urban area of the City. There

is a considerable amount of open land outside the urban area.

Business occupations in Tanga City included 3.5% as small business managers, 15.5% in shop

sales and services, and 16.7% as street vendors. The agricultural and other natural resource

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activities occupied 23.4% of the labor force as farmers, 1% as livestock keepers, and 40% are

dealing with fishing activities.

Source: (Tanga District Commissioner office).

1.7 Significance of the study

i. The findings explained in chapter four helped both the Companies and

Organisations which are providing M-Commerce as well as users to generate

new knowledge in the field of M-Commerce and its application.

ii. Evidence to the problems faced by Providers and users of M-Commerce were

provided.

iii. Recommendations and appropriate ways of solving the problems were identified.

iv. The study provided an opportunity for the researcher to apply theoretical training

in practical problems as part of the fulfilment of the attainment of the Bachelor

of Arts in Procurement and Supply Management offered by Sokoine University

of Agriculture.

1.8 Organization of the Research Report

The study was organized in five chapters; where by each chapter states its contents. However; all

contents found in each chapter had significant relationship to each other. Chapter one was all

about background to the study, statement of the problem, research objectives, research questions,

scope of the study, location, population and economy, organization of the study and finally the

definition of important key terms. Chapter two was about literature review, which comprises of

international studies, regional studies, and theory of the study and variable relationships.

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Chapter three was concerned with research methodology showing description of study area,

research design, sampling, data collection, data analysis and interpretation techniques and

limitation of the study. Chapter four was about Findings in which data were presented as well as

analyzed and the discussion about findings was done. Finally chapter five provided conclusion as

well as recommendation.

1.9 Definition of Key terms

i. Mobile Commerce is the use of a terminal, and public mobile network to access information

and conduct transactions that result in the transfer of value in exchange for information, services

or goods. (Rutherford B. (2009).

ii. Challenge is something that needs a lot of skills, energy, and determination to deal with or

achieve.(Macmillan Dictionary)

iii. M-pesa is an electronic payment and store value system that is accessible through mobile

phones.( Ignacio Mas & Dan Radcliffe, (March 2010).

iv. Providers this includes a Vodacom M-PESA Agent who is a retailer who has been appointed

by Vodacom as an authorized provider of M-PESA services.

v. Users includes customers of m-pesa who are registered and non-registered customers.

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2.0 LITERATURE REVIEW

Waqar aziz and Yaqoob Hashmi (2009) analyzed several limitations which were facing Mobile

commerce in Sweden. These limitations included the following; short access life due to low

power voltage and the small battery size, limited process power due to low power computer

processing chips, higher risk of storage and transaction errors, restricted view of large or

multiple page images due to very small screen display, less ‗surfability‘ i.e limited navigation

facilities because of restricted cursor and button z-control. Other limitations are such as

restricted graphics and colors, as sometimes any color and image could not be supported, no

usage of Transmitted Control Protocol (TCP) that prevent information exchange with majority of

internet providers.

Brian Rutherford (March 2008) analyzed several challenges which were facing M-Commerce as

follows;

When mobile users were on the move and the network is likely to fail, they might lost a service

and this could interrupt them when there were doing any commercial transactions. Therefore

there was possibility of losing a service.

The nature of wireless devices opens up new vulnerabilities in terms of security. Not only this

meant the issues in terms of the mobile connection being breached, but also the increased

likelihood of losing or having the mobile device stolen and data compromised. This represented

issue in convincing m-commerce users that their personal data was secure during and after

transaction.

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The increased availability of contextual information and its use in m-commerce had implications

for privacy. While users might benefit from m-commerce applications utilizing new contextual

information, there was also an increased fear of this information being used maliciously.

Network Variability: There existed a variety of mobile networks types from GSM to CDMA to

3G network types, which for the most part were not interoperable. This was why many users

were not able to use their mobile device in another jurisdiction based on a competing network

type.

Also this author had indicated that cultural perception to mobile phones was one of the barrier to

M-Commerce. In countries such as Japan and Finland, the cell phone was seen more as a symbol

of social status, especially in the under-30 age demographic, than in North America. This

resulted in cell phone turnover rates that average 1-2 years in these countries versus the 3-5 years

experienced in the United States.

Economy developments were one of the factors which could be used to distinguish developed

countries to developing countries. Developed countries such as European countries, USA and

China. People were using other devices such as tablets despite of mobile phones to make

transactions. While in developing countries such as Tanzania and Kenya people were still using

only mobile phones in making of transactions. Also mobile phones took place in Developed

countries since 1990s while in developing countries it took place in the early 2000s.

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Also cost of conducting business using mobile devices have dropped for 80% in USA but in

Tanzania it has not yet dropped down.

According to the 15th Bled Electronic Commerce Conference held in Bled Slovenia, June 15-19,

2002 which included Panel members such as Nilmini Wickramasinghe, Christer Carlson, J. Felix

Hampe, Richard A. Scudder and Doug Vogel analyzed various major issues and challenges and

developments concerning Mobile Commerce in Asia, Europe and the USA.

The panel analyses various challenges which hinder development of M-commerce in Asia

Pacific such as Lack of Infrastructures, delay in launch of higher Bandwidth service, luke-warm

reception of new multi-function handsets and a general ―wait and see‖ attitude. There also, of

course, is the generally depressed. Global economy that has hit Asia harder and is tending to last

longer than in some other parts of the world.

Enthusiasm for m-commerce remains reasonably high although expectations have been lowered

as pragmatic reality takes hold. Looking more closely at some specific areas:

China had the potential to move quickly towards m-commerce. The rate of cell phone

introduction coupled with the poor existing wire-based infrastructure provides an opportunity.

However, there are many problems to be overcome, not the least of which are ineffective

payment systems in conjunction with a banking industry that is struggling under mountains of

bad debt and focusing attention to meet WTO entrance commitments.

Korea was an interesting example of a country with both heavy use of phones and heavy use of

e-commerce that has yet to come together to any great extent in m-commerce. Phones are used

for audio and computers are used for internet access and two have yet to merge to any great

extent e.g., in wireless PDAs. One minor reason stems from a unique phone system but

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suspicions are that the real issues were more culturally based in not yet recognizing the phone as

a true data device.

In United States of America the greater the number of choices had limited the growth of m-

commerce in the U.S, but the shift from voice communication to data communication (and the

shift from simple phone service to mobile commerce) was slowly taking place. A large number

of organizations made 802.11b technologies available inside their companies. 802.11a (and soon

802.11g) technologies which offered significantly higher bandwidth were also becoming

available. One interesting challenge to the large carriers was the emergence of hot-spots in

airports and hotels. These hot-spots allowed anyone with a Wi-Fi card to login for a fee and

begin surfing the net.

Europe had seen a strong movement towards M-Commerce over the last Years. Due to the

enormous market growth of standard GSM telephony, for all future service extensions (HSCSD,

GPRS, EDGE or UMTS) extremely optimistic forecasts had been given. This, in turn, induced

such extreme business expectations that business cases were calculated well in advance of their

realization. The auctions in some European countries for UMTS frequency band packages thus

lead to incredibly high price levels. In conjunction with the marked fall in International stock

markets, the telecommunications industry has, since mid 2001, faced severe problems, being part

of a serious recession in some European countries which is still lasting (e.g. Germany).

Furthermore, the acceptance of new basic services such as GPRS has up till now been very slow

and all the test beds for

UMTS pilots failed to show convincing results. With GPRS we saw not only the horrendous

pricing as a major cause but also the lack of really convincing value added services on offer.

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Those advanced services mentioned most often in the literature, e.g. m-payment or ticketing and

ordering, have not been introduced widely.

Lennart Bangens & Bjorn Soderberg (April, 2011) analyzed some of the challenges which were

facing Small and Medium Entrepreneurs in conducting their businesses by using Mobile

Commerce in Tanzania.

Due to the restriction imposed by Bank Of Tanzania, in which the value of transaction was not

allowed to be more than Tshs 500,000/- for a single transaction these lead to some barriers to the

Medium Entrepreneurs when they wanted to make transactions which is above 500,000/-

Businesses located in a cluster tended to learn and trust MMT faster than those operating in a

dispersed manner (i.e. with less links to businesses in the surrounding area). This was also

affected by the locality of agents such as nearby MPESA agents providing adequate service.

There were three factors which stands as critical for Mobile Money Transfer in Tanzania, which

are agents‘ float and cash levels, knowledge and capacity, as well as security arrangements.

The agent‘s float was the key instrument for instant deposits of money. Customer deposits were

instantly active in their M-PESA accounts because of the design of MMT system. Hence,

customers rely on agents‘ earlier deposits at NBC (National Bank of Commerce is holding the

M-PESA float on Vodacom‘s behalf) to be able to send money immediately after a deposit is

done at the MMT agent‘s office. The system works as long as the agents – normally two or three

times a week – top up their floats by depositing cash into their NBC account. To balance the

float according to customer demand is a non-trivial task, requiring substantial cash-flow

management by the agent. When the float was zero the agent cannot accept more deposits and

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there was sometimes a delay in the system as an NBC deposit may not instantly be credited the

agent‘s float.

Many agents run parallel business and see M-PESA as a supplementary side business. These

Agents normally had little prior knowledge of financial transactions and therefore had to

learn-by-doing from scratch. The handling and stocking up of large amounts of cash were

Potential bottlenecks for many agents that found it difficult to plan the demand for customer

withdrawals and deposits. Mostly the M-PESA system was straightforward with few technical

glitches and problems. Sometimes customers sent to the wrong number and wanted to block a

transfer which often requires the intervention by Vodacom as few agents knew how to sort it

out. As M-PESA in Tanzania is USSD-based (Unstructured Supplementary Service Data)

there was no link to the handset‘s address book, which means that the phone numbers must be

entered manually. This increased the risk of entering the wrong number.

The study showed that the majority of the agents visited operated M-PESA as a side business

and normally had very little or no modifications for hosting an M-PESA office. Hence, there

were few security arrangements for minimizing thefts and robbery. The exception was the

Vodacom‘s own M-PESA offices that was more bank-like with safety glass and bars to deter

break-ins.

Another challenge for Vodacom presently was to make M-PESA accessible for everyone by

decreasing the number of users per agent. In July 2010, M-PESA in Tanzania had 4,500

agents and four million users, which mean there are on average about 900 users per agent. In

Kenya the average is about 600 per agent.

Vodacom‘s model to deliver MMT services draws heavily on the capacity of the agent

14

network. The model comprises three layers; agents, super-agents, and aggregators. The

super-agents are banks and should not be confused with aggregators that are not banks. This

model was first introduced in Kenya and had recently been launched in Tanzania as well to

solve the float and cash levels amongst smaller agents. In this structure the small agents operated

in a tiered system supported by an aggregator that supplies cash on commission basis as 30 % of

the aggregate‘s commission is drawn by the aggregator.

As most of the researchers as described the difficulties which customers awere facing in using

mobile commerce services, as well as the problems which agents of Mobile Money Transfer are

facing in providing services to their customers. The researchers had not identified some of the

problems which the Mobile Network Operators were facing as well as the impacts of Mobile

Commerce to other sectors of economy such as Banks.

Also there are some of the problems which are facing users of M-commerce who are living in

rural areas such as in adequate skills in using M-Pesa service.

Also the Researchers in international and regional level had not indicate culture if was one of the

barriers to users as well as providers of mobile commerce services.

2.1 Theory of the Study

The diffusion theory, also known as the diffusion of innovations theory, is a theory concerning

the spread of innovation, ideas, and technology through a culture or cultures. The theory has

been extensively studied by sociologists, psychologists, and anthropologists. Diffusion theory

states that there are many qualities in different people that cause them to accept or not to accept

15

an innovation. There are also many qualities of innovations that can cause people to readily

accept them or to resist them.

According to diffusion theory, there are five stages to the process of adopting an innovation. The

first stage is knowledge, in which an individual becomes aware of an innovation but has no

information about it. Next is persuasion, in which the individual becomes actively interested in

seeking knowledge about the innovation. In the third stage, decision, the individual weighs the

advantages and disadvantages of the innovation and decides whether or not to adopt it. (Daniel

W. Surry, 1997).

A researcher is trying to link this theory with the topic as m-pesa is a product which have been

introduced not more than three years ago, and the main problem was the adoption of this kind of

technology by people of Tanzania as most of the people up to the prior introduction of m-pesa in

2009 were using other traditional methods such as transferring value in kind and transfer of

money through buses.

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2.2 Variable Relationship

Adequate number of Agencies: For the mobile commerce services to be provided effectively,

the companies which are providing mobile commerce services were needed to recruit enough

agencies. To ensure each agency had an ability to serve few users as much as possible.

Transaction fees: Transaction fees should not be higher so as to enable each individual to afford

to use the services.

Government policies: The government was needed to set policies which could motivate people

to invest in providing mobile commerce services in Tanzania. Also the Government should set

policies which can protect users of mobile commerce services against possibilities of fraud and

theft.

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Knowledge of financial transactions: Many agents run parallel business and saw mobile

commerce as a supplementary side business. These agents normally had little prior knowledge of

financial transactions and therefore have to learn-by-doing from scratch.

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3.0 RESEARCH METHODOLOGY

3.1 Description of the Study Area

Tanga City is one of the eight districts in Tanga Region, north eastern Tanzania and lies in the

central eastern part of the Region and is bordered by Muheza and Pangani districts to the west

and south, Mkinga to the north, and the Indian Ocean to the east.

The main reason for a Researcher to select Tanga as case study area is that Tanga is one of the

major cities in Tanzania in which its economy is growing fast as well as there is a major

competition between major mobile network operators which are providing mobile commerxce

services. This includes Vodacom, Tigo, Zantel and Airtel.

3.2 Research Design

The study was conducted through the use of case study design as it would focus on a single area

(area of study) and types of data collection used were questionnaires and interviews. Moreover,

case study design gave a room for a researcher to analyze the particular unit in detail with its

findings was unique from the rest.

The rational of this case study design compared to others is that it formulates a problem for more

precise investigation from an operational point of view. The major emphasis in this study was on

the discovery of ideas and insight.

3.3 Sampling

19

3.3.1 Sampling Frame

The target population was the agents and users of Vodacom m-pesa in Tanga city. The researcher

used the population of 175 people as he divided the population into clusters, in which there were

160 users of m-pesa, 10 agents and 5 staffs of Vodacom. The main purpose of dividing the

targeted population into clusters was to reduce costs as well as to get precise information.

3.3.2 Sampling Technique

Sampling technique used was probability sampling. Probability sampling is a technique whereby

each member of society has an equal chance of being selected. In this technique a researcher

collected data from the population of 170 people in which data collected from users were 160 as

well as data collected from agents were 10.

3.3.3 Sampling Unit

The sampling unit for this study included staffs of Vodacom, agents of M-Pesa in Tanga city and

the users of M-Pesa in Tanga city were included.

3.3.4 Sampling Size

The sample size was obtained from total population which was the total number of people at the

study area. Due to the reasons that it is impossible to get the total number of people who are

using Vodacom on a certain area. A researcher took a sample size of 178. From table 3 the

sample size used was 178 people on which 163 were users of Vodacom m-pesa, 10 were agents

and 5 were staff of Vodacom M-pesa.

20

Table 1: Sample size

S/N RESPONDENTS NO. OF RESPONDENTS

1. USERS OF VODACOM M-PESA 163

2. AGENTS OF VODACOM M-PESA 10

3. STAFF OF VODACOM M-PESA 5

TOTAL 178

Source: Field Data (March, 2012)

3.4 Types of Data

Both primary and secondary data will be collected that is;

3.4.1 Primary Data

Data were collected through conducting interviews with five staff of Vodacom and the manager

of Vodacom in Tanga. As well as a researcher interviewed the 10 agents of Vodacom m-pesa in

Tanga city. A researcher distributed questionnaires to the staff of Vodacom, users and agents. A

researcher collected data from population of 178 people.

3.4.2 Secondary Data

In this, Data will be collected from accessible documents which includes already published

reports, books and news papers.

21

3.5 Sources of Data

Data were collected from Primary source as well as Secondary sources. Primary Data sources

included Observation Method as well as Survey Method.

In observation method, Researcher observed on how the staff of Vodacom M-Pesa providing

services to their customers.

But in survey method, a researcher was collecting Data by asking questions to users of Vodacom

M-Pesa. Through this, questionnaires were provided.

From secondary data, a researcher obtained Data from internal sources as well as external

sources. From Internal sources data were obtained from accounting resources. But from external

sources included data from government publications, reports from Tanzania Communication

Regulatory Authority, Ministry of Communication and Transportation.

3.6 Procedures of Data collection

Procedures for collection of Data were as follows:

A Researcher prepared questionnaires in both English and Kiswahili languages, then he seek a

letter of approval from university which could allow him to collect Data. Then he went to the

offices of Vodacom in Tanga city for the aim of introducing himself and being given authority of

collecting Data from staff, agents and its users.

After being given an authority, a researcher started to interview staff of Vodacom who are

dealing with m-pesa as well as the manager of Vodacom in Tanga. Also a researcher interviewed

10 agents of Vodacom m-pesa. Lastly a researcher distributed questionnaires to the staff and

agents of Vodacom m-pesa. As well as he interviewed users of m-pesa and distributed

questionnaires to them.

22

3.7 Data Collection Techniques

Techniques of Data collection included the followings;

3.7.1 Interviews

In conducting interviews, the researcher conduct face to face interview with Vodacom Tanga

Branch staffs, agents and users using both structured and unstructured questions. Questionnaires

relating with the study will be prepared and distributed to the selected sample of 188. A

researcher was able to collect data from 178 people.

3.8 Data analysis and interpretation Techniques

Data collected were processed by summarizing the bulk data and analyzing them using both

quantitative and qualitative methods. The analysis involved calculations, averages, percentages

and trends. Presentations of results were in the form of tables and words. Finally the conclusions

and recommendations based on the findings of the research.

3.9 Limitations

Limitations which were faced by the Researcher included financial constraints and time. A

researcher was not able to meet a budget of Tshs 311850/- as he could be able to get only Tshs

100000/-. Also the time of collecting Data and was not enough as a researcher had only two

weeks of collecting Data. A researcher was not able to meet all the respondents in time as well as

to get two meals per day due to financial constraints.

23

4.0 FINDINGS AND DISCUSSIONS

4.1 Introduction

This section of the report presents analysis of the data collected from the study and interprets

them in relation to the study objectives and research questions formulated. It is divided into four

sections. The first section was to explore the availability of mobile commerce services in Tanga

City. The second one was to identify potential challenges in the provision and utilization of

mobile technology in mobile commerce in Tanga city. The third one was to explore the factors

affecting the provision and utilization of m-commerce in Tanga city. And the last section was to

identify strategies used by organizations which were providing m-commerce services in solving

the problems associated with m-commerce.

4.2 To explore the availability of mobile commerce service in Tanga City.

4.2.1 Demographic characteristics of Respondents (Users).

Based on the figure 2 there were 163 respondents who are users of Vodacom m-pesa on which

61% were male and 39% were female. This implies that there is significant male domination in

using m-pesa services according to people surveyed. The number of female was few due to the

reasons that number of female students in high school level and colleges were few compared to

male who are many. Also female respondents who are employed were few due to the reasons

that female employees who had been employed by the government are few compared to men as

well as private sector in Tanga city is comprised of industries in which most of the employees

are men.

24

Fig. 2: Percentage of Gender

Source: Field data (March 2012)

Based on the figure 2 there were 163 respondents (Users) of m-pesa, where by 51% were

students, 34% were employees from different sectors (including teachers, engineers,

accountants). Entrepreneurs were 15% in which most of them were small scale entrepreneurs.

25

Figure 3: Percentage of Activities

Source: (Field Data, March 2012).

4.2.2 Most of the Users are also using other services.

As shown on figure 4 the study revealed that most of the users of m-pesa are also using other

services, including Tigo-pesa and Airtel Money. According to the study conducted, it was

revealed that out of 163 respondents 46 respondents were using M-pesa only, while 97

respondents were using M-pesa and Tigo pesa, while 123 users were using M-pesa, Tigo-pesa

and Airtel money.

26

Figure 4: Percentage of Users

Source: Field Data (March 2012)

4.2.3 Period of using M-pesa

As shown on table 2 the study revealed that most of the people interviewed by the Researcher

had been using m-pesa for the period of not more than a year. As the above table show that 43%

of people had been using m-pesa for the period of not more than one year while 31% had been

using m-pesa for the period of one year up to three years. But only 10% showed that people had

been using M-pesa for the period of more than three years.

27

Table 2: Period of Using M-Pesa

PERIOD OF USING M-

PESA

NUMBER OF USERS PERCENTAGE

LESS THAN 6 MONTHS 26 16%

6 MONTHS -1 YEAR 71 43%

1 YEAR-3 YEARS 50 31%

MORE THAN 3 YEARS 16 10%

TOTAL 163 100%

Source: Field Data (March 2012)

4.3 To identify potential challenges in the provision and utilization of mobile technology in M-

Commerce in Tanga City.

4.3.1 Potential challenges faced by the users of M-pesa;

Out of 163 people who were asked by the Researcher if they are faced with any problem when

using m-pesa services 141 people said yes, and only 22 people said no. This revealed that 87% of

the respondents were faced with challenges when they were using m-pesa while only 13% were

not faced with any challenges when using m-pesa.

i. Network failure during the time when the user wanted to withdraw money or transfer

money.

28

ii. High charging rates in which the below charging rate is Tshs 500 whereby some of the

respondents who have low income couldn‘t afford.

iii. Also Agents do not have enough cash as well as services are not available 24 hours which

made some of the respondents failed to get money during the emergence need.

56% of the respondents said that network is a major problem which they are facing, while 33%

of the respondents said high charging rates. And the remaining 11% mention other problems

such as; few agents of M-pesa, inadequate cash flow to agents, abusive language from agents,

inability to get customer care services from Vodacom at appropriate time.

4.3.2 Potential challenges faced by the Agents of M-pesa;

Out of 10 agents who were interviewed by the Researcher 8 of them said network is a major

challenge which they are facing. Other challenges mentioned by the agents of m-pesa are such

as; most of their customers do not have adequate knowledge on using m-pesa, most of their

customers do not have identity cards, and agents are not getting enough cooperation from

Vodacom specifically from customer care services.

4.3.3 Potential challenges faced by the sales executives of M-pesa.

Sales executives of Vodacom in Tanga are the ones who are working closely with agents and

users of m-pesa. But they said that the major challenge which they are facing is; most of their

customers do not have adequate knowledge of using m-pesa as most of them they usually

transfer money to the wrong people, others they usually forget password or PIN number. They

also said that they very few ( only three staff) who are serving more than 40 customers per day.

29

4.4 To explore factors affecting the provision and utilization of M-Commerce in Tanga City.

4.4.1 Lack of National Identity cards

Most of agents of M-pesa claimed that registration of users of m-pesa is very cumbersome as

most of the People do not have identity cards. Voters‘ registration cards are often used as a

replacement of National Identity card to verify identity of users.

4.4.2 Anti Money Laundering requirements

Also Anti money laundering which have been established by the central bank of Tanzania

requires the transactions no to be above two million shillings, which is not useful for people who

need to makes transactions which is above that amount.

4.4.3 Network failure

This is a major challenge for the users of m-pesa services. Even the management of Vodacom

said that it is not a challenge to their customers only but also to them. Most of Vodacom

customers have been faced with this challenge during the time when want to transfer money or

withdraw money.

4.4.4 High charging rates

Most of the customers claimed that they have been charged high rates during the time they

transfer money or withdraw money. The minimum fee for the person who transfers any amount

of money is tshs 500. While the person who withdraw money is charged tshs 200. Where by

most of the users saw this as unfair.

30

4.4.5 Most of Agents do not have enough cash flow.

Customers of m-pesa claimed that most of agents do not have cash flow and the services are not

available in 24 hours. This means that customers who need to purchase luku or withdraw money

cannot get a service during the night hours.

4.4.6 Inadequate training to Agents and Users of m-pesa

Agents of m-pesa claimed that Vodacom Company do not providing training frequently. Agents

are trained on all aspects of the operation of the system including Vodacom‘s anti money

laundering (AML) policies. The training is delivered by an external agency and is tailored to the

role of the person being trained.

But training is not on- going process which is updated regularly to reflect developments to the

platforms and changes takes place to the AML laws and regulations as well as money laundering

and terrorist financing trends and development.

4.5 To identify strategies used by organizations this provides M-Commerce services in solving

problems.

4.5.1 Staff increases:

Vodacom has formed a dedicated local team to support the development and management of M-

PESA including over 15 members of staff from Product Development, Customer Care,

Technical, Finance, Sales and Marketing. In addition, the operator has recruited an external

agency to manage and train their agent network.

31

4.5.2 Customer training and support

Vodacom has been communicating with its customers through the varied messages regarding the

value and use of m-pesa services. Vodacom is now investing more resources in radio

advertisements and print publications to clearly communicate the benefits and use of their

services. Agents are now trained to offer customer support and education.

Vodacom also provides 24/7 dedicated customer care call center for users of m-pesa. Calls to

the customer care centre are free and response times are quite good.

4.5.3 Network Management

Vodacom uses small external agency named Afrikings PTY to monitor agent activity. The

agency is responsible for train agents and providing them with copies point of sale material such

as brochures, banners, posters and agent number stickers. The agency is also responsible for

collecting training records and customer registration forms and delivering these to Vodacom

offices for storage.

32

5.0 CONCLUSIONS AND RECOMMENDATIONS

5.1 Conclusions

5.1.1 Factors affecting provision and utilization of mobile commerce in Tanga city.

As most of the people lacks identity cards, the registration of new users as well as provision of

services by Agents become very cumbersome. Also the anti money laundering policy established

by the central bank of Tanzania sometimes is not useful for people who need to make transaction

of more than Two million shillings.

There is double standard problem as fee is charged to both the one who send money and the one

who has to receive the money. The minimum amount charged to the person sending money is

tshs 500 while the minimum amount charged to the person receiving money is tshs 1000.

5.2.2 Challenges facing providers and users of mobile commerce

Network is a major challenge to users, agents and the sales executives of Vodacom Company.

Users of m-commerce seem to be faced with two major challenges which are high transaction

fees and lack of enough cash to agents of M-pesa.

But Agents of m-pesa claimed that users do not have identity cards which is not safe for the

activities concerning with money. And customers do not have adequate knowledge on using m-

pesa.

5.2.3 Strategies used by organizations this provides M-Commerce services in solving

problems.

33

Vodacom has increase the number of staff over 15 including Product Development, Customer

Care, Technical, Finance, Sales and Marketing. Also the Vodacom have hired a company called

Afrikings PTY to monitor the services offered by agents.

Vodacom has also use radio advertisement and print publications to communicate with agents

and users. As well as it provides 24 hours customer care services to users and agents.

5.2.4 Availability of m-commerce in Tanga city

Users of m-pesa seem to be people who have been employed by either public sectors or private

sector and students who are either in high schools or in colleges. Most of entrepreneurs do not

prefer to use m-pesa services due to the anti money laundering policy established by the central

bank of Tanzania.

And most of the users of m-pesa are also using other services such as Tigo-pesa, and Airtel

money.

34

5.3 Recommendations

The following are the recommendations which have been suggested by the Researcher for the

purpose of solving the challenges which are facing providers and users of mobile commerce on

the case of m-pesa.

1. Training is needed to be provided to agents of m-pesa and users. And before Vodacom

grant permission to a person to work as its agents its capacity in terms of financial and efficiency

should be measured properly and he should be kept under probation of at least the period of 6

months.

2. On the side of network problem which is a major hindrance on the efficiency of m-pesa,

Vodacom should increase number of staff on engineers department or establish a department

which will be dealing with networks solutions.

3. There is a need to amend anti money laundering policy by the central bank of Tanzania by

set a limit of amount of money which could be useful also to business organizations. And agents

of m-pesa should be up dated on changes taking place on Anti money laundering policy as well

as other changes taking place on the operations of m-pesa services.

4. Vodacom is also needed to increase the number of agents by ensuring that number of agents

goes together with the increase of number of users.

5. Also the government is needed to ensure all of its citizens gets national identity cards so as

to minimize the possibility of criminal issues to take place.

35

6. There is a need for Vodacom to reduce the transaction fees so as to enable people with lower

income to use the service. As well as not to charge fee to both the person who send money and

the person who receive money.

36

REFERENCES:

Aziz W. & Hashmi Y.(2009) Usability principles for Mobile Commerce. Lulea

University of technology. pp. 10-12

Boadi R. A, Shauk G. A(2006) M-Commerce Breakthrough in Developing Countries

(The role of M-Commerce in wealth creation and economic growth in developing

countries). Department of Business Administration and social science. Lulea

University of Technology. pp. 10,35-36

Brian Rutherford (2008). An analysis of the current state of mobile commerce.

Departmental of Mechanical and Industrial Engineering. University of Toronto. pp.

13-14.

Camner G. , Sjoblom E. , Pulver .C (2009) . What makes a successfull Mobile

Money Implementation. GSMA.

Chew. Anthony A (2006). Adoption of mobile commerce in USA. California State

University. p. 4.

Jack W. & Suri T. (2010) Economics of M-Pesa. Geogre Town University and Mit

sloan. pp. 17-19.

37

Kothari C.R (2009) Research Methodology. New Age International Publishers. 2nd

Revised Edition p. 176

Lennart Bångens & Björn Söderberg (2011). Mobile Money Transfers and usage

among micro- and small businesses in Tanzania (Implications for policy and

practice). pp. 18-20

Madanmohan .R (2011). Regional Hubs of Excellence and Innovation. Mobile

Africa Report 2011. pp. 27-35.

Nilmini Wickramasinghe, Christer Carlsson, J. Felix Hampe, Richard A. Scudder

and Doug Vogel. 15th Bled Electronic Commerce Conference held in Bled

Slovenia, (June 15-19, 2002).

Surry. D (1997). Diffusion Theory and Instructional Technology. University of

southern Mississippi.

38

APPENDICES

Appendix 1. Work Plan

Activities Nov 2011–

Jan 2012

March 2012 Apr -

July

2012

1ST

Week 2nd

Week 3rd

Week 4th

Week

Research proposal

development and

submission

XXXX

Survey and

familiarization of

MMT organizations

XXXX

Data collection XXXX

Data analysis XXXX

Report writing. XXXX

Report submission XXXX

39

Appendix 2: Budget

Budget item Cost per Unit Total In cost

Meal (Including lunch, snacks

and soft drinks)

4,000@20 days 80,000

Stationary (printing papers, pens,

photocopying)

Writing and photocopying papers,

flush disk, pens, printing costs

120,000

Transport (Bus fare, taxi) Bus -600@20days

Taxi 10 trips @ TShs. 3,000 per trip

42,000

Communication (Airtime, internet

surfing)

Airtime TShs 5000x10 days

Internet TShs 500x10days

55,000

Incidentals 5% Total cost 14,850

Total 311,850

40

Appendix 3: Questionnaires

A: Questionnaire for users of Vodacom M-Pesa

Dear respondents,

My name is NOEL KIMAMBO, a student at Moshi University College of Cooperative and

Business Studies. I am carrying out a study to find out the challenges which are facing providers

and users of mobile commerce in Tanga City. You have been identified to provide your views

because of your involvement in mobile commerce. Your responses are therefore very important

for the survey. Please be assured that the information you provide will be treated as confidential.

Your participation is completely voluntary,you may skip any questions that you want, and you

may stop at any point. There is no right or wrong answer to any question.

Do you wish to participate?

Yes No

General Information

Occupation …………………………………………………

Age ……..

Gender …………...

Research Information

(Mark with an ―X‖ in the appropriate margin).

41

1. Do you use services like M-Pesa, Tigo Pesa or Airtel Money?

Yes ( ) No ( )

2. Which type of Mobile commerce are you using currently?

M-Pesa ( )

Tigo pesa ( )

Airtel money ( )

Easy- Pesa ( )

Nmb mobile ( )

Others ( )

3. For how long you have been using mobile commerce?

- Less than 6 month ( )

- 6-12 months ( )

- 1-3 years ( )

- Over 3 years ( )

4. Do you face challenges in using mobile commerce services?

Yes ( ) No ( )

42

5. If yes, what are the challenges? (Probe: cost, time, lack of information, availability of

money with agencies not reliable; poor network connectivity)

How far is to your nearest Mobile commerce agency?

- Very close (100 m) ( )

- Not very far (101-500m) ( )

- Far (500-1000m) ( )

- Very far ( above 1km) ( )

6. Is there a time you have received money from a relative/friend and the Agency could not

provide you with the service?

a. Yes ( )

b. No ( )

7. If yes (Q6) what were the reasons?.................................................................

8. How do you judge the capacity (in terms of capital and services ) of the nearest

Agency?...............................................

9. What should be done to improve on the mobile commerce?

(Mention)..............................................................

10. What is your other suggestion on solving these challenges

43

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

44

B: Questionnaire for Agencies of Vodacom M-Pesa

Dear respondents,

My name is NOEL KIMAMBO, a student at Moshi University College of Cooperative and

Business Studies. I am carrying out a study to find out the challenges which are facing providers

and users of mobile commerce in Tanga City. You have been identified to provide your views

because of your involvement in mobile commerce. Your responses are therefore very important

for the survey. Please be assured that the information you provide will be treated as confidential.

Your participation is completely voluntary, you may skip any questions that you want, and you

may stop at any point. There is no right or wrong answer to any question.

Do you wish to participate?

Yes No

Age _______________________ Sex ___________________

Occupation ________________________________________

Street __________________________________________

Please put a tick in appropriate box.

1. Your providing mobile money transfer services through which mobile networks?

Vodacom ( ) Tigo ( ) Airtel ( ) Zantel ( ); Other ( )

45

2. For how long you have been providing mobile money transfer services?

…………………………………………………………………………………

3. How many customers do you getting per day………………..

4. What are other income-generating activities do you do?

5. Do you use customers‘money for your personal activities before the customer collects

her/his money? Yes( ) No ( )

6. If YES, why? ..........................................................................................................

7. Have you ever experience a situation when you could not provide the customer his/her

money? Yes ( ) No ( )

8. If Yes to Q 7. Explain why?................................................................................................

9. What are the challenges facing in providing services to your customers

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)……………………………………………………………………………………………….

10. Are you getting enough cooperation from the mobile companies you are working for?

46

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………………………………………………………………………………………….

11. What are the challenges facing your customers?

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)……………………………………………………………………………………………….

12. What should be done to minimize the problems which are facing your customers?

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)……………………………………………………………………………………………….

47

C: Questionnaire for staff of Vodacom M-Pesa

Dear respondents,

My name is NOEL KIMAMBO, a student at Moshi College of Cooperative and Business

Studies. I am carrying out a study to find out the challenges which are facing providers and users

of mobile commerce in Tanga City. You have been identified to provide your views because of

your involvement in mobile commerce. Your responses are therefore very important for the

survey. Please be assured that the information you provide will be treated as confidential. Your

participation is completely voluntary—you may skip any questions that you want, and you may

stop at any point. There is no right or wrong answer to any question.

Do you wish to participate?

Yes No

Company____________________ Position_____________________

Sex________________

1. For how long your mobile company have been providing mobile money transfer services

in Moshi Municipality?

…………………………………………………………………………………

48

2. How many customers your serving per day…………………

Please explain the following:

3. What are the challenges you are facing in providing services to your customers in Tanga

city?

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)……………………………………………………………………………………………….

4. Are you getting enough cooperation from your agencies?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………………………………………………………………………………………….

49

5. What are the challenges which are facing your customers?

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)……………………………………………………………………………………………….

6. What your company have done until now in order to minimize the problems which are

facing your customers?

(a)………………………………………………………………………………………………

(b)……………………………………………………………………………………………….

( c)………………………………………………………………………………………………

(d) ………………………………………………………………………………………………

(e)………………………………………………………………………………………………

50

Appendix 4: Sample size determination

Formula for determining sample size

Where:

n = Sample size (Being determined)

N=Population size known

p= Sample proportion (assumed to be 0.02)

q= 1-p

e= 0.02 (since the acceptable error should be

z= Standard deviation at a given CI (z= 1.96 at 95% CI)

= 187.6981

Therefore the sample size will be 188

Source: ( Kothari CR.)

51

Appendix 5: Tables used in analysis of Data

Table 3: Gender

GENDER TOTAL PERCENTAGE

MALE 99 61%

FEMALE 64 39%

TOTAL 163 100%

Source: Field Data (March 2012)

Table 4: Activity

ACTIVITY TOTAL PERCENTAGE

STUDENTS 83 51%

EMPLOYEES 56 34%

ENTREPRENEURS 24 15%

TOTAL 163 100%

Source: Field Data (March 2012