Enabling Mobile Money Policies in Tanzania: A 'Test and Learn' Approach to Enabling Market-Led Digital Financial Services

Abstract

Tanzania is one of the fastest growing mobile markets: Four mobile money providers have deployed 153,369 agents that have registered 31.8 million accounts, 11 million of which are active on a 90-day basis. The providers are processing more than 99 million transactions per month valued at over 3 trillion TZS (US$1.8 billion). The number and value of transactions per month is growing very fast, and soon Tanzania could be the world’s biggest mobile money market.Since 2008 Bank of Tanzania has taken a progressive approach to designing a regulatory framework that has greatly contributed to the development of a competitive market where mobile network operators (MNOs) are greatly contributing to advance digital financial inclusion. Even in the absence of a regulation, Bank of Tanzania has provided sufficient legal certainty and consistency while allowing innovation and protecting customers. Bank of Tanzania has taken a “test and learn” approach to enable MNOs to provide mobile money services, providing the industry regulatory guidance through the prudential and market conduct requirements listed in the “letters of no objection” released to authorize the MNOs and their partner banks to provide these new services. While learning from the implementations, Bank of Tanzania has developed a draft regulation that allows both banks and non-banks to provide mobile payment services, this draft regulation has gone through two iterations and will soon be adopted.Tanzania is a mobile money and digital financial inclusion success story. The case study that GSMA is releasing today showcases this journey that has produced a number of lessons for policymaking and regulatory authorities, as well as for the industry.