TANZANIA:Central bank chief upbeat on mobile payments

TANZANIA’S success in mobile money payment owes much to a bold stance taken by regulatory authorities to allow innovations to grow instead of killing it with too many rules.

This was said in Dar es Salaam by the Governor of the Bank of Tanzania (BoT), Prof Benno Ndulu, at the launch of World Development Report 2016.

Prof Ndulu said the authorities had allowed telecoms to conduct mobile money payment services knowing it was a good platform to improve financial services. The authorities had allowed the new services by mobile network operators and reviewed the risks later before coming up with regulations.

“The regulatory authorities took bold stance to support innovations to grow. They reviewed the risk before coming up with regulations so that you don’t kill it off by overregulation, “ he said.

“We have taken an approach where you allow new products to be tested in the market while knowing quite clearly they may have some negative consequences but as they are tested you observe the kind of risks and you regulate, “ he said.

Tanzania is one of great success stories in financial inclusion with the coming up of mobile network operators to champion provision of mobile payment services. The country is now leading in mobile money payment in terms of volumes and transaction overtaking Kenya where mobile money payment services had begun with M-Pesa.

Prof Ndulu said when they allowed mobile network operators to offer mobile money payment services banks had cried wolf accusing the Central Bank of allowing unfair competition.

They realised however it was a platform to improve their services, he said. “They later realised it was a platform for banks to offer improved services and today banking services have expanded enormously using ICT platforms... Simbanking, etc,”he said.

“On the other hand you would not expect mortal and brick to pull that long,” he said. Prof Ndulu had earlier said one of the main benefit of the digital technology was allowing countries to leapfrog and catch up with others.

He said digital technology had helped Tanzania to bridge the vast distance of the country whose size is equal to Kenya, Uganda and Rwanda when put together. “With this size of the country, it is difficult to offer financial services using brick and mortar,”he said.

He said the digital technology had helped to enhance convenience of service where use of service became easy to use. It also led to huge reduction of fee for service provisions.

SOURCE:DAILYNEWS