Tanzania:Mobile money services now command over 35 pct stake in GDP
The contribution of mobile money services to the Gross Domestic Product (GDP) in Tanzania now has reached 35 percent, thanks to new initiatives being taken by the communication sector.
Speaking in Dar es Salaam recently, head of M-Pesa Product Development and Marketing at Vodacom Tanzania Limited Isack Nchunda, said many people in the country nowadays get their financial services through mobile phones.
The involvement of mobile financial services in the GDP has tremendously increased reaching 35 percent due to the usage, he said.
Citing, Nchunda said, electronic money technology transfers 1.6trn/- per month, and this is equivalent to over 12trn/- if multiplied per year nearing the national budget, which enables customers to facilitate money transfers for settlement of numerous bills.
However, he said that, mobile money transfers have nothing to do with banking transactions, noting that in reality these has little in contention with banking operations as each mode of financial operation has its customers.
Some services which are offered by mobile phone companies are not applicable in banks, and likewise there are those which are offered by banks which are not applicable to mobile phone companies, he pointed out.
Loans are not offered by mobile phone companies and are issued by banks, while personalised money transfers to relatives or marginal service providers like payments of rents or bills cannot usually be conducted through banks.
Elaborating on thefts that may occur in mobile phone cash transfers, he said, this happens when the customer discloses their pin number to a friend or a relative and mistakenly forgets their mobile phone and is then operated by the unauthorised individual.
Tanzania is the eighth country in Africa in terms of size of mobile phone users and second in East Africa for the service.
Recently, businessmen expressed growing concerns over mobile financial services and called upon the government to, through the Bank of Tanzania (BoT), take precautionary measures against cybercrime.
The chairman of Tanzania Chamber of Commerce Industry and Agriculture (TCCIA) in Mbeya Region, Julius Kaijage, was quoted expressing worries over the potential loses should the money service firms fold or otherwise experience share or stock falls.
“My worry is that should these companies undergo financial downturns then customer funds are placed at risk?” As such, his advice to BoT is to regulate the mobile financial service activities to ensure that client’s money is safe.
Even more so, he recommends that BoT guarantee the mobile phone companies to secure the money in circulation in case of a worst case scenario like bankruptcy.
In other words, BoT should financially insure the service providers so that in the event of, admittedly unforeseeable, business crash they would have the reserve funds to pay off all transactions.
In recent years, mobile phone companies in the country have established financial services attracting many rural as well as urban dwellers.
The reception of the services have proved so promising that there is not a single mobile service provider that has not adopted the service with a twist of their own, Vodacom (M-pesa), Airtel (Airtel Money), Tigo (Tigo Pesa) and Zantel (Ezy-pesa).