Formal non-bank financial institutions have played a significant role in reducing the number of financially excluded adults in Tanzania. 

This finding and other results of the FinScope Consumer Survey Tanzania 2017 report were made public on 28 September; and, for the first time, the official launch of the survey results coincided with the publication of the full dataset on the i2i data portal

As a researcher working at the i2i, I found the launch interesting for two reasons. Firstly because of the evolution of the FinScope Survey in Tanzania from it's initial launch in 2006 to the release this year. The second reason was seeing the role that agent banking has played in helping to address some of the traditional urban/rural divides in financial inclusion.

The evolution of the FinScope survey in Tanzania provides a case study of a survey that is being adapted to support the Tanzania National Financial Inclusion Framework (NFIF 2014). The first FinScope (in 2006) was a landscaping exercise to understand the demand for and barriers in accessing financial services among its adult population and was based on a target sample of 5,000 respondents. A pen-and-paper interview (PAPI) was used in collecting the data. 

The subsequent FinScope surveys were based on larger sample sizes to capture the different population characteristics (7,680 respondents in 2009, 7,987 respondents in 2013 and 9,459 respondents in 2017).   

The FinScope 2017 survey comes after the promulgation of the NFIF 2014 and has seen data collection methodology change from PAPI to computer-assisted, personalised interviews (CAPI). In addition, FinScope 2017 incorporated mapping of all financial service access points found in the urban enumeration areas and within a radius of 5 km in rural enumeration areas. The mapping of financial access points in relation to households provides a more accurate measure of proximity or accessibility to financial institutions. 

The 2017 results reveal that financial exclusion has declined from 55% in 2009 to 28% of the total adult population (represented by those that are 16 years and older). Concurrently, there has been an increase in the uptake of non-bank (other formal) financial institutions from 7% in 2009 to 48.6% in 2017. 

Mobile money operators are categorised as a non-bank financial institution and stand out as being not only the formal financial service with the widest reach, but also the service most frequently used. Usage of financial services is defined as adults accessing their financial services within the past 30 days. 

According to the 2017 report, there has been a 12% increase of people living in a 5 km radius of a financial access point in rural areas. When the enumeration areas in the 2017 survey are layered with the 2014 GIS census of financial access points, only 66% of people were within reach. The majority of financial service providers found within a 5 km radius were mobile money agents with 55% of them providing services for multiple providers. Two thirds of the mapped bank agents are also mobile money agents, which is another indication of the pervasiveness of the agent model in delivering financial services in Tanzania.

The FinScope 2017 survey also showed that there are more financially excluded adults (34.9% of total rural adults) in rural areas than in urban areas (14.8% of total urban adults). Non-bank institutions are serving 48.1% of rural adults, which is much higher than the 5.9% of rural adults served by commercial banks.

The 2017 findings also indicate a disparity in the financial lives of men and women. More female adults are financially excluded (30.3%) and use informal financial services providers (9%), compared to male adults, with 25.5% being financially excluded and 4.4% using informal service providers.  

For more information on financial services uptake in Tanzania, including credit and savings behaviour, visit our interactive data portal. You will be able to compare and analyse different indicators and download the Open Source datasets for closer scrutiny.