Competitions to speed up financial inclusion

Available statistics show that the banking penetration sits just under 20 percent with about 47 percent cited distance as a reason for not having an account. Mwanga Community Bank (MCB), Managing Director, Abby Ghuhia said in an interview that the banking sub-sector will benefit from fair competition given that no commercial bank is enjoying free government deposits.

“All players will move to the community for deposits mobilisation and prices equilibrium achieved in the sector through equal competition,” he said.

He also said banks will be competing with mobile network operators who are offering financial services at much affordable and convenient to small micro-enterprises especially in rural areas.

“The competition will force banks to acquire and utilize alternative delivery channels in order to be competitive in terms of technology,” he said. Through this transformation, formal financial inclusion will increase with increase of usage of services and products at affordable cost to the clients.

He said MCB will not be left behind in the growth of the sub-sector by mobilising resources in terms of capital and deposits to ensure sustainability in the competitive market especially in the rural area where financial inclusion is very low.

“The use of alternative delivery channels (branchless banking) we shall be able to penetrate market segments beyond our frontiers,” he noted. Also the government policy on rural economic transformation through agriculture financing that involves community banks as key players will provide opportunity for the bank to grow.

Also, the financial sector as a whole will benefit on the industrialisation drive that will be a catalyst for economic growth. Commercial sector will also grow as a result of multiplier effect. Tanzania is ranked near bottom in bank branch penetration averaging less than 0.5 per cent bank branches per thousand square kilometers.

SOURCE: DAILY NEWS

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