In Tanzania, a quiet revolution is unfolding, profoundly impacting the lives of ordinary citizens through increased access to tailored financial solutions. This expanded reach of formal financial services has effectively broadened financial inclusion, spanning from the grassroots to the pinnacle of society.

The FinScope 2023 Report vividly portrays the narrowing socio-economic gap, revealing a decrease in financially excluded adults from 7.8 million in 2017 to 6.4 million in 2023. Notably, formal financial services accessed through mobile money have surged from 60 percent in 2017 to an impressive 72 percent in 2023, showcasing a remarkable shift in accessibility and usage.

The narrative of progress in Tanzania extends far beyond the realm of mobile money transactions. On one front, it addresses the critical issues of accessibility and affordability for marginalised communities, providing a solution for those excluded from formal financial services.

Simultaneously, the evolution extends to the innovative and unique mobile money products that are driving advancements in other facets of formal financial services, such as insurance and group savings.

In tandem with the nation's progression, Vodacom remains steadfast in its commitment to forging a digitally inclusive society. Through a blend of innovation, collaboration, and strategic partnerships, M-Pesa has emerged as a powerful force for change, serving as a catalyst that empowers individuals and communities throughout the country.

The story goes beyond mere transactions, portraying mobile money as a transformative force shaping the landscape of financial inclusion in Tanzania.

The journey that began with M-Pesa as a simple money transfer platform, has since evolved into a multifaceted financial ecosystem. Today, M-Pesa offers not only money transfer services but also lending, group savings, digital insurance, and a range of life-changing products. This evolution aligns perfectly with Tanzania's aspirations for digital and financial inclusion.

Insurance

The FinScope 2023 Report underscores a 5 percent decline in insurance uptake, leaving the majority of Tanzanians without coverage. This gap presents an opportunity to educate and tailor insurance products to meet their needs and income levels.

VodaBima, a part of the M-Pesa ecosystem, has been actively addressing this challenge by focusing on health and motor insurance. Having sold over 1.5 million digital insurance policies VodaBima is a pioneering force in the digital insurance landscape.

Under VodaBima, collaborating with 20 motor and health insurance partners, customers seamlessly purchase insurance products and receive cover notes and policies directly on their mobile phones.

M-Pesa Director Epimack Mbeteni emphasised, "We've designed our medical insurance products to accommodate low-income earners who often lack access to quality healthcare. Our motor insurance takes a comprehensive approach, ensuring convenience for drivers and riders in both service access and claims resolution."

Vodacom Tanzania’s M-Pesa Director Epimack Mbeteni engages in a meaningful discussion with Tanzania Prime Minister Kassim Majaliwa, highlighting the pivotal role of M-Pesa services in enhancing financial inclusion at the Road Safety week commemorations in Mwanza. Vodacom has been the Government’s strategic partner in driving road safety awareness Nationwide through the VodaBima service under M-Pesa. PHOTO | COURTESY

The importance of simplified and affordable insurance products becomes evident when considering the redirection of ad hoc cash handouts for medical costs towards annual medical insurance, costing as little as Tsh70,000 per person per year. VodaBima stands at the forefront, revolutionising insurance accessibility for Tanzanians.

Group savings

According to The FinScope 2023 Report, 47 percent of Tanzanians save to meet their cashflow needs, yet the challenge persists in fostering a savings culture for developmental objectives. M-Pesa has emerged as a catalyst for change, particularly through its digital savings product, M-Koba. This innovative solution addresses security and transparency concerns within savings groups, providing a lifeline for Tanzanians, especially women.

M-Koba has facilitated over 200,000 registered groups, enabling them to save and access loans, transacting hundreds of billions. This not only streamlines the savings process but also ensures traceability of funds. Unlike traditional methods involving metal boxes and dedicated treasurers, some of whom may be untrustworthy, M-Koba brings accountability to savings, marking a significant shift in financial practices.

International money transfers (IMT)

M-Pesa has revolutionized cross-border remittances, providing a seamless solution for individuals in the diaspora or businesses engaged in regional trade. Customers can now effortlessly send and receive money instantly to/from their M-Pesa wallets, with the platform's built-in currency conversion ensuring recipients receive funds in their local currency.

Vodacom M-Pesa's International Money Transfer (IMT) portfolio processes transactions which is growing by over 15 percent YoY supports cross-border remittances for purposes such as supporting family members, funding investment projects, and facilitating trade proceeds. This not only underscores the significance of mobile money in advancing digital payments but also solidifies M-Pesa's pivotal role in the government's ongoing digitisation initiatives.

One might ask how Vodacom is able to facilitate such big chunks of payments however, Mr Mbeteni reflects: “In a true demonstration of ‘Together We Can’Vodacom works with a wide range of partners to facilitate these transfers within Africa and globally, allowing our customers to receive from over 200 countries from Europe, USA, Australia, Middle East to Africa itself. We keep on onboarding more partners to ensure that our customers have at their fingertips the options that will allow them to trade competitively and connect with loved ones.”

M-Pesa's commitment to leading the digital payments sector goes beyond expectations. From a diverse lending portfolio to a range of digital payment solutions, M-Pesa's influence is evident. The latest financial report from Vodacom highlights M-Pesa's significant impact, disbursing over Tsh30.3 billion to more than 20,000 recipients in the farming community within the past two and a half years. This underscores M-Pesa's role in advancing financial inclusion in Tanzania's agricultural value chain through its M-Kulima initiative.

Strategic offerings like Songesha and short-term loan facilities have already benefited over 3.5 million customers, reaching 65,000 agents with micro-loans totaling over Tsh1 trillion. This remarkable feat solidifies M-Pesa's position as the country's foremost digital lender, reshaping the financial landscape and empowering millions in Tanzania.

Beyond the transactions

• Over Tsh1 trillion disbursed in M-Pesa loans from January to December 2023
• More than Tsh6 trillion processed through M-Pesa merchant transactions annually.
• Over 280,000 active merchants accept payments via M-Pesa.
• 200,000+ active savings groups using M-Koba.
• Tsh180 billion in M-Pesa interest paid back to customers to date.
• A staggering 1.4 billion transactions are processed in M-Pesa per year.