The Alliance for Financial Inclusion (AFI) conducted a Q&A session with Bank of Tanzania (BOT) Governor Benno Ndulu on financial inclusion progress in his nation. Below are the results, lightly edited.
1. How has making a commitment to the Maya Declaration helped align and achieve Bank of Tanzania’s (BOT) national financial inclusion initiatives?
The commitment to the Maya Declaration has built impetus to enhance efforts to increase the level of financial inclusion in Tanzania. The commitment was used to provide a national target of achieving an access level of formal financial inclusion to 50 percent of adults by 2015. It also included commitments to continue to be part of the Alliance for Financial Inclusion (AFI) fraternity in sharing financial inclusion experiences. This has helped Tanzania to gain capacity and share its experiences with other AFI members and take several steps to promote mobile financial services (MFS) as one of the potential technological innovations for financial inclusion. Tanzania hosted two AFI events in Zanzibar, in 2011 and 2012 that led to the creation of the African Mobile Phone Financial Services Policy Initiative (AMPI).
The commitment to the Maya Declaration also boosted efforts toward implementing interoperability solutions for enhancing efficiency and affordability and already a market-based interoperability project is experiencing good progress. It also allowed the country to continue its efforts on consumer protection and financial literacy initiatives. Furthermore, the Maya Declaration led to the bank’s implementation of agent banking in the first quarter of 2013. Already commercial banks have taken up agency banking in the country. Finally, from the commitment, Tanzania developed its national financial inclusion framework, which includes, AFI financial inclusion core indicators to measure progress on financial inclusion initiatives, which the country committed to incorporate in its measurement framework.
2. Based on your experience, what are the benefits and opportunities in making a public commitment under the Maya Declaration?
It builds positive peer pressure to ensure that at national level, financial inclusion initiatives are achieved. It enables cross-sector identification of a common national goal. This enables relevant key stakeholders to focus on the common goal. It boosts cooperation and open dialogues to devise financial inclusion initiatives to meet the target.
3. Please share your key lessons learned in building on BOT’s measurable target under the Maya Declaration to develop Tanzania’s national financial inclusion strategy.
The measureable target has enabled Tanzania exceed its Maya Declaration target of achieving 50 percent access to formal financial services by 2015. Results of FinScope 2013 reveal that the level of access to formal financial services has reached 57.4 percent. Measureable targets enabled the public and private sector to understand the national goals on the level of financial inclusion intended to be achieved within a specified time frame. The measurement led to the development of other targets based on the financial inclusion dimensions that are usage, quality and welfare. It also enabled the public and private sector to identify key priority initiatives that should be implemented to achieve the measurable target. Generally, by having a measurable target, it became clearer in setting up objectives and realistic initiatives that link with core enablers for financial inclusion. Technology has been attributed to the fast pace of increasing financial inclusion in Tanzania, and will continue to be part of the efforts of Tanzania in enhancing and deepening financial inclusion through linkages of non-bank service providers with bank’s services to offer a wider range of financial services.
4. Now that BOT achieved its initial commitment to reach 50 percent of the population, what are the key next steps to identify a new national target?
The first step is to devise new targets using a cooperative framework under the coordination mechanisms created under the national financial inclusion framework. The framework involved key stakeholders from the public and private sector who are part of the coordination mechanisms. The second step will be to agree on the amendments and align with the initiatives stipulated in the action plan. The third step will be to implement the action plan as amended or modified with new targets.
ABOUT THE AUTHOR
Benno Ndulu is the Governor at the Bank of Tanzania and a member of the AFI Steering Committee. He is a vocal advocate of financial inclusion and AFI’s peer-to-peer learning model.
Categories: General Financial Inclusion