[2007-04-18]  Most Citizens Have No Access to Financial Markets
Most Tanzanians are excluded from the country's financial services market, a survey conducted on the mainland and Zanzibar reveals. The survey, which was donein July-August last year, sought to establish demand for, and barriers to, financial services.

It found that only nine per cent of the adult population, comprising more than 21 million people, had a bank account while 27 per cent had never heard of a savings account.

In addition 89 per cent of the people have access only to informal finance or are excluded from the financial system altogether. "People are seven times more likely to use a personal contact to transfer money than a financial institution," says the report.

The reasons for this were varied: 21 per cent said they did not know how to open an account, 20 per cent said bank charges were too high and another 20 per cent said banks were too far from their homes.

In addition, 63 percent said they had no bank accounts because they did not have regular incomes while 33 per cent said they had no money to save. Twenty-eight per cent said they were jobless. Seventeen per cent said it was too expensive to run a bank account while some people said they felt they did not qualify.

Titled Finscope Tanzania, the survey further found that 31 per cent of those who save hide their money in a secret place they deem safe.

It noted that many people, especially the poor and those in rural areas, need more information to enable them to participate in the country's financial market. And this information can only be provided if the industry develops more effective links between the formal, semi-formal and informal financial sub-sectors, it added.

The survey was sponsored by the Financial Sector Deepening Trust (FSDT) and conducted in collaboration with FinMark Trust (FMT), the Steadman Group and the National Bureau of Statistics (NBS).

FSDT aims to give more people access to the formal financial sector and also encourage use of the available facilities, especially by the poor.

The trust supports a variety of financial institutions to make them sustainable, improve the quality of their products and services and build capacity to deliver these.

FinMark Trust (FMT) is a South Africa-based non-profit organisation that strives to make financial markets friendly to the poor while FinScope is a market research tool it developed.


Copyright © 2007
Source: Copyright © 2007 The East African.