THE proportion of Tanzanians using formal financial services had reached 76 percent by 2023, up from 57percent in 2013, the Treasury has indicated.Dr Mwigulu Nchemba, the Finance minister, shared this brief when launching a new complaints system for users of financial services regulated by the Bank of Tanzania (BoT) here yesterday.

The initiative is being tested as a pilot project for financial technology services under BoT supervision, he said, noting that many people avoid formal financial services and resort to costly informal borrowing. He said that the government has been conducting regulatory reforms meant to protect Tanzanians from high-interest informal loans, whereas the current project is expected to facilitate resolving numerous complaints.

Some of them relate to predatory loans, thus boosting public confidence in formal financial services and improving accountability among regulated providers, he said.Informally provided loans typically require repayment within three months and at exorbitant interest rates, whereas formal financial institutions offer longer repayment terms with lower costs, he said.

“When you borrow one million shillings formally, you repay after two years or more, not three months and triple that amount,” he stated, explaining the growth in financial service usage to advancements in fintech.Financial sector technology has simplified sending and receiving money, he said, expressing satisfaction with the current pace of adopting fintech methods. By 2028, upwards of 85 percent of Tanzanians will be included in formal financial services, he said.

Emmanuel Tutuba, the BoT governor, pointed at progress in expanding financial inclusion while acknowledging sharp challenges remaining, including limited innovation-friendly environments.He lamented that there is low financial literacy, weak links between providers and users, alongside reliance on analog systems, while hinting that in partnership with the National Financial Inclusion Council, BoT has launched the complaints format to improve financial service delivery.

This will increase fintech adoption and protect users of formal financial services, as the measures will enhance accountability, promote quality, secure, affordable financial services, and help to combat money laundering.
The complaints system will enable users to report challenges or disputes related to financial services efficiently and transparently as it allows any user to access and use it anytime and anywhere “and helps us take prompt action to improve financial inclusion,” he said.

Sauda Msemo, the deputy governor said the complaints mechanism will enhance transparency and efficiency in handling users’ grievances, building trust in formal financial services as the portal considers all types of users.
Instituting the portal enhances support in implementing the National Financial Inclusion Strategy launched in 2023. “Our expectation is to accelerate efforts to reach more Tanzanians with formal financial services,” she added.