Aiming to reduce poverty and enhance sustainable socio-economic development in the country, SBFIC Tanzania collaborates closely with local institutions to strengthen the national microfinance sector and promote employment opportunities. Striving to increase financial inclusion in the country, SBFIC’s projects contribute essentially to the Sustainable Development Goals as well as Tanzania’s National Vision 2025 to transfer the country from a least developed to a middle-income country.
In Tanzania, projects in the areas of institutional capacity building in the microfinance sector, financial education / savings mobilization and vocational capacity building have been established successfully. All equally important for an enhanced microfinance sector, the projects complement each other and are expected to have a wide-ranging impact.
SBFIC Tanzania’s efforts in institutional capacity building increase the service quality of financial institutions while financial education trainings for children and adults as well as business simulation games enhance their financial knowledge, employment opportunities and business skills, increasing their incomes and savings. Hence, increased access to financial services as well as enhanced financial know-how among the population lead to increased financial inclusion while at the same time decreasing non-performing loans. With Tanzania’s credit and insurance markets being imperfect, increased savings are especially important for individual well-being as they reduce the dependency on loans and insure the poor against times of economic hardship.
Between 2014 and 2017, the share of Tanzanians with an account at a bank or another type of financial institution increased from 40 percent to 47 percent (compared to 17 percent in 2011). The effect of increased financial inclusion is even more visible when considering the share of the country’s low-income population (poorest 40 percent) with an account at a bank or financial institution. Increasing from 25 percent to 37 percent between 2014 and 2017 (9 percent in 2011), a high proportion of the poor gained access to the formal financial market during the past years. Great success of financial education efforts in schools can also be seen when considering the percentage of people who have an account and whose highest educational attainment does not exceed primary school. The increase from 33 percent in 2014 to 41 percent in 2017 (7 percent in 2011) is partly reflective of SBFIC’s extensive financial education efforts in the country. Similarly, savings at financial institutions have increased from 9 percent in 2011 to 12 percent in 2014. While 13 percent of the whole Tanzanian population used savings clubs or a person outside the family to build up savings in 2014, the percentage was even higher for the low-income segment of the population (16 percent). 32.8 percent of the population have saved for a farm or business in 2014.
Complementing the financial education efforts, SBFIC has effectively contributed to an increase in the quality of services in the local microfinance sector by conducting an extensive number of trainings of MFI staff since inception.
Overall, Tanzania has made great strides towards enhanced socio-economic development during the past years, which can partly be attributed to SBFIC Tanzania’s efforts to increase financial inclusion and reduce poverty within the country. We will continue our efforts to contribute to the achievement of the Sustainable Development Goals as well as the National Vision 2025 and look forward to continuing seeing the impacts of our work.