Mobile Money & Digital PaymentsConference - Tanzania 2015

presented by Kingstone Pumula Kanyile

CEO - Mtilikwe Financial Services

Topic ; Levelling the Playing Field

Tackling the Uneven Playing Field

1. Ultimate Goal of Financial Inclusion

2. Identifying drivers to an Uneven Playing Field

3. Multi Stakeholder Engagement

4. Level of Financial Inclusion in United Republic of Tanzania

5. Recommendations

Principal objective Financial Inclusion

• To provide access to and adoption of financial services and products to people so as to manage their lives better and acceleration their progress into economic opportunity whilst ensuring that adoption and usage of these services sustainably leads them out of a vicious poverty cycle.

Eliminating barrier's1. Cost of delivering services - Rates of fraud, overcharging, failed transactions, distances travelled (and costs related to such travel).

2. Inadequte Consumer protection awareness – Especially Women

3. Non exclusive agency agreement & Disclosures

4. Anti Trust Competition Practice – Eliminate monopoly

5. Real-time interoperability & Financial settlement.

Multi Stakeholder Approach

1) Policy makers - Policy thrust that promote sustainable poverty reduction through access to financial services.

2) Legislature - Harmonising constitutional provisions and ideals of a democratic society with freedom to associate with anyone prompting sustainable poverty reduction.

3) Regulatory - Principle Driven versus Policy Driven Governance. Technology will always be ahead of lawmakers.

Multi Stakeholder Approach

4) Operator /Service Providers - Profit motive vs interoperability and shared infrastructure.

5) Banks, MFI - levying discretionary bank charges on mobile money transactions

6) Agent Network - Real-time communication accompanied with consistent epayments of commission fees directly into mobile wallets as float at the end of each Calendar month

Depth of Financial Inclusion in Tanzania

• Increase of 18.46 % in number of registered users. From 26 871 176 registered users in 2012 to

31 830 289 in 2013.

• Total National Population 45 million people as at 2012 census.

• 11,7 million people financially excluded representing 26% of the 16 years and above age group

Mobile Money Service Providers in Tanzania

• Vodacom Tanzania - M-pesa

• Airtel Tanzania - Airtel Money

• MIC - Tigo PESA

• Zamtel - Ezy PESA

Depth of Financial Inclusion in Tanzania

14 % have / use Formal Bank Products

44 % have / use Formal Non Bank Products

16 % Use Informal Mechanism Only

26 % Financially Excluded

Comparison with Neighbouring countries in the regionThis is how Tanzania stands compared to her neighbours in the Region

Country Class 1 Class 2 Class 3 Class 4 Total%age %age %age %age

South Africa 75 4 11 10 100Kenya 29 38 8 25 100Namibia 62 3 4 31 100Botswana 41 18 8 33 100Lesotho 38 20 23 19 100Tanzania 14 44 16 26 100Swaziland 44 6 13 37 100Nigeria 33 10 17 40 100Rwanda 23 19 30 28 100Ghana 34 7 15 44 100Zimbabwe 26 9 24 41 100Uganda 21 7 42 30 100Malawi 19 7 19 55 100Zambia 14 9 14 63 100Mozambique 12 1 9 78 100

Class 1 Have / Use Formal Bank Products#Class 2 Have / Use Formal Non Bank ProductsClass 3 Use Informal Mechanisms OnlyClass 4 Financially Excluded

Recommendations1. Accelerate Interoperability initiatives with tax incentives / credits

2. Implement Principal Driven Regulatory Governance

3. Appoint Mobile Money Consumer protection and awareness champions within communities for timeous dispute resolution.

4. Automated Clearing & Financial Settlement

5. Streamlining Cross network transfers ( Moral Suasion)

Recommendations to achieve Higher Financial Inclusion

• Use of mobile financial services that is an order of magnitude lower cost, faster, higher quality, greater transparency/auditability

1. Delivery: Locations and various other retail financial access points, including product availability, quality of service, pricing, and transaction volumes and values.

2. Use: Consumer and household usage patterns and behaviour, customer or agent perceptions of products and brands, financial habits, rates of adoption of different products, and product usage patterns (including of enabling devices like mobile phones).

3. Barriers to Adoption (especially as they apply to women): Rates of fraud, overcharging, failed transactions, distances travelled (and costs related to such travel).

Future Opportunity from Level playing field

• Level 1: reducing the resources (in both time and money) that poor people must expend to finance their current activities

• Level 2: increasing poor people’s capacity to manage economic shocks and capture income-generating opportunities

• Level 3: generating economy-wide efficiencies by digitally connecting large numbers of poor people to their peers, financial service providers, government services, and other counterparties

Thank You – Asante Sana

May the road rise up to meet you.May the wind be always at your back.

May the sun shine warm upon your face;the rains fall soft upon your fields and until we

meet again,may God hold you in the palm of His hand.