ATMIA Africa Regulatory Liaison CommitteeAfrica Country Profiles: Tanzania
Africa Banking Country Profiles - Focus on
Tanzania
Hosted by ATMIA Africa Regulatory Liaison Committee
Michael Lee, CEO, ATMIA
Andrew Dean, Executive Director, Africa and Middle East, ATMIA
Guest Speaker: Danford Mbilinyi, CEO, Umoja Switch, Tanzania
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Agenda
ATMIA Africa country profile Tanzania – Stakeholders,
Regulation, Country and Banking Data
Tanzania in-country insight – interpretation and opportunities
Umoja Switch profile and role
Q&A, items for future discussion
ATMIA Africa Regulatory Liaison Committee – Country Profiles
A service for ATMIA members from the ATMIA Africa
Regulatory Liaison Committee
Profiles of select African countries for banking, ATM and
payments stakeholders
Country Profile for: United Republic of Tanzania
Content – ATMIA Africa RLC Country Profile for Tanzania
Country Snapshot
Industry Stakeholders
Banks, switches, solution providers, associations
Legislation and Regulations
Banking, payments, privacy and data protection
Country Metrics
Addressable population, road and electricity infrastructure, banking
maturity, technology penetration, business environment
Banking and Payment Metrics
Mobile, ATM, payments, financial inclusion
Dodoma
Dares Salam
Tanga
Arusha
MusomaBukoba
Mwanza
TaboraKigoma
Sumbawanga
Mbeya
Iringa
Songea Mtwara
Lindi
Morogoro
Manyara
Wete
Mkoani
Sansibar
Population: 52 million
Regional co-operation: Part of
East African Community (EAC) -
Burundi, Kenya, Rwanda,
Uganda
Neighbours: Also include DRC,
Zambia, Malawi, Mozambique
Top cities:
• Dar es Salaam – 4.4m
• Mwanza – 700k
• Arusha, Dodomo, Mbeya,
Morogoro – 300 to 400k+
Top industries:
• Agriculture – 34%
• Wholesale & retail trade;
repair of vehicles household
goods; Restaurants and
hotels – 13%
• Finance, real estate and
business services – 10.2%
• Construction – 9.9%
United Republic of Tanzania - Snapshot
Industry Stakeholders – Banking and Payments
Central Bank, Switches and Clearing Houses
Licensed Banks
Industry Associations
Regional Economic and Banking Co-operation
Mobile Money Operators
Other Telecoms and Solution Providers
Industry Stakeholders – Banking and Payments
Central Bank, Switches and Clearing Houses
Bank of Tanzania – Central Bank
TISS (Tanzania Inter-bank Settlement System)
DECH (The Dar es salaam Electronic Clearing House)
UmojaSwitch
Licensed Banks
https://www.bot-tz.org/BankingSupervision/registeredBanks.asp
Industry Associations
Tanzania Institute of Bankers (TIOB)
Tanzania Bankers Association
The National Payment System Advisory Council (NAC)
SCCULT (Savings and Credit Co-Operative Union of Tanzania)
CBA (Community Bankers Association)
TAMFI (The Tanzania Association of Microfinance Institutions)
Regional Economic and Banking Co-operation
EAC (East African Community)
ASBEA (Association of Savings Banks in East Africa)
EAC PSSIP (EAC Payment and Settlement Systems Integration Project)
Kenswitch (Kenya) Interswitch (Uganda) and RSwitch (Rwanda)
Industry Stakeholders – Mobile, Telco and Payment Solutions
Mobile Money Operators
Airtel Money
Tigo Pesa
Vodacom M‐Pesa
Zantel Ezy Pesa
Other Telecoms and Solution Providers
Tanzania Telecommunications Company Limited (TTCL)
- telecommunications provider
Smart - telecommunications provider
Halotel - telecommunications provider
Selcom - solution provider for banking and payments
Maxcom - solution provider for banking and payments
Legislation and Regulations – Banking and Payments
Banking
Payments, Agency, Mobile and Electronic Banking
Supervisory Methodologies, Acts, Regulations and
Circulars in Placehttps://www.bot-
tz.org/BankingSupervision/SupervisoryMethodololgies.asp#LicensingConditions
The Banking And Financial Institutions Act, 2006 https://www.bot-tz.org/BankingSupervision/BAFIA2006.pdf
The Banking And Financial Institutions (Internal Control
And Internal Audit) Regulations, 2014
https://www.bot-
tz.org/BankingSupervision/documents/New%20Docs/The%20Banking%20and%20
Financial%20Institutions%20(Internal%20Control%20and%20Internal%20Audit)%2
0Regulations,%202014.pdf
Guidelines On Agent Banking For Banking Institutions,
2013
https://www.bot-
tz.org/BankingSupervision/GUIDELINES%20ON%20AGENT%20BANKING%20FO
R%20BANKING%20INSTITUTIONS%202013.pdf
The Electronic Money Regulations, 2015
https://www.bot-tz.org/PaymentSystem/GN-
THE%20ELECTRONIC%20MONEY%20REGULATIONS%202015.pdf
Electronic Payment Schemes Guidelines, 2007
http://www.bot-
tz.org/paymentsystem/Docs/e_Schemes%20Guidelines%20June%202007.pdf
Payment Systems https://www.bot-tz.org/PaymentSystem/paymentSystem.asp
The National Payment Systems Act, 2015 https://www.bot-tz.org/PaymentSystem/NPS%20Act%202015.pdf
The Payment Systems Licensing And Approval
Regulations, 2015
https://www.bot-tz.org/PaymentSystem/GN-
THE%20PAYMENT%20SYSTEMS%20LICENSING%20AND%20APPROVAL%20
REGULATIONS%202015.pdf
Legislation and Regulations – Inter-bank Settlement, Financial Inclusion, Data Protection
Inter-bank Settlement
Financial InclusionNational Financial Inclusion Framework
https://www.bot-tz.org/NFIF/Governor's%20Speech%20rev_10122013.pdf
Data Protection, Privacy and Data Sovereignty
Data Protection Bill https://www.privacyinternational.org/sites/default/files/privacy_tanzania.pdf
Constitution - Article 16 http://www.judiciary.go.tz/downloads/constitution.pdf
Data Sovereignty Awaiting feedback from Michalsons
Inter-bank Settlement System https://www.bot-tz.org/PaymentSystem/TISS%20Bronchure.pdf
TISS Rules and Regulations http://www.bot-tz.org/paymentsystem/TISS%20Rules%20and%20Regulations.pdf
Country Metrics
Data sources:
• World Bank
• World Economic Forum
• Transparency
International
Please see next slide for
comments on data
Tanzania Kenya South
Africa
Nigeria Ghana
Addressable PopulationGDP per capita (US$) 955 1 358 6 484 3 203 1 442
Population (millions) 52 45 54 178 27
Employment of working age pop. (of age 15+) 86% 61% 39% 52% 68%
Road and Electricity InfrastructureQuality of roads 43% 61% 70% 38% 53%
Quality of electricity supply 35% 55% 51% 23% 42%
Banking MaturityAvailability of financial services 52% 67% 88% 59% 57%
Soundness of banks 60% 75% 93% 68% 62%
Account at financial institution (of age 15+) 19% 55% 69% 44% 35%
Commercial bank branches (per 100,000 people) 2 6 11 6 6
ATMs per 100,000 (per 100,000 people) 6 10 66 16 8
Mobile accounts (per 100,000 people) 32 58 14 2 13
Technology PenetrationMobile cellular subscriptions (per 100 people) 63 74 149 78 115
Fixed broadband subscriptions (per 100 people) 0.2 0.2 3.0 0.0 0.3
Internet users (per 100 people) 5 43 49 43 19
Fixed telephone subscriptions (per 100 people) 0.3 0.4 6.9 0.1 1.0
Business Environment
Corruption Percpetion Index (Rank out of 168) 117 139 61 136 56
Ease of doing business (Rank out of 189) 139 108 73 169 114
Retail Banking Data - Access
Retail Banking Channels
Access Tanzania South Africa
Number of bank branches 1 200 5 140
Number of ATMs 1 600 30 000
Number of Bank Point of Sale (POS) 3 500 500 000
Number of agents (mobile and bank) 242 000 NA
Adult population per access point Tanzania South Africa
Bank branch 24 310 7393
ATM 18 233 1267
POS 8 335 76
Agents 121 Not available
Retail Banking Data - Access
Account and Cardholders - Tanzania
Mobile money users 17.6m
Bank account holders 5.5m
Debit card holders 3.4m
Credit card holders 0.2m
Top Retail Banks - Tanzania
Number of
branches
Number of
ATMs
National Microfinance Bank (NMB) 175 600
CRDB Bank 120 400
National Bank of Commerce 52 301
Official Data – BOT and TCRA
Official Statistics
Banking and payments statistics - BoT June
2013
Inter-bank settlement system volume and value
Electronic clearing house volume and value
ATM volume and value
POS volume and value
Internet banking
Mobile banking
Mobile payments
Cross border money transfers
Telecommunications statistics - TCRA Dec 2015
Mobile money subscriptions *
Airtel Money 3 999 453
Tigo Pesa 5 252 523
Vodacom M‐Pesa 7 963 700
Zantel Ezy Pesa 423 673
TOTAL 17 639 349 *Source: Tanzania Communications Regulatory Authority (TCRA)
Next Steps
Extend profile to include required metrics and profile information for
bank and non-bank stakeholders
Obtain input from broader members and non-members on profile
contents and scope
Finalise profile scope
Obtain participation and input from in-country central bank or switches
or banking association in Tanzania
Expand country profiles to rest of “Group of 5”
Expand country profiles to “Top 15” in sub-Saharan Africa
The Payment Space in East Africa
Presented by Danford MbilinyiCEO UmojaSwitch, Tanzania
The United Republic of Tanzania
The Country Tanzania
Size: 939.3 square kilometers (including water bodies)
38% of land used for agriculture
GDP: An average of 7% annually
Literacy Level: 70.6% (male 75.9, female 65.4)
Population:44.9 m(2012), around 50m in 2015
In 2012, more than 50% were below 18
Interpretation
INTERPRETATION
More than 50% are below 18 years
5.6% are above the age of 60
Due to the demographics above, it is evident that
Tanzania has technology-ready generation.
A young generation, easy to adopt new tech
However, what are the channels and spending habits?:
ATMs (cash), mobile (mobile)
Financial Inclusion
Banked community is around 13.9 % (Finscope Survey, 2013)
Total Financial Inclusion: 57.4% -formal mechanisms
The Payment Situation
There has been a significant evolution in the payment
space in Tanzania.
Major channels being ATMs, Mobile and POS.
Major players:
- UmojaSwitch: Running shared infrastructure
- Selcom: Dominant in mobile banking and aggregation
- MaxCom: Strong player in retail payments – non bank
- Banks (running own switches)
- MNOs – the dominant ones in mobile money
- Other players
The Trend…
0
500
1000
1500
2000
2500
3000
3500
4000
2013 2014 2015
ATM
POS
ATMs keep increasing (slow
growth compared to
POS)despite stiff competition
from other channels
Rapid increase in number of
POS in 2014 attributed to new
agency banking regulations
Given the demographics,
ATMs will keep increasing
The trend……
•Number of ATMs: Around 1600 by end of 2014
pushing TZS 720 billions in value.
•Number of bank driven POS: Around 3500 pushing TZS
17 billion per month in value
•With banked community still at 14%, mobile money
drives more than 70% of all payments in EA.
26
The East African Perspective
№ Country Population
GDP (PPP)
(Billions of
$US)
GDP (Nominal)
(Billions of
$US)
Literacy (%)
East African
Community153,301,178 297.791 122.672 73.34
1. Burundi 10,395,931 7.884 2.723 67.2
2. Kenya 45,010,056 125.77 55.3 87.4
3. Rwanda 12,337,138 17.362 7.431 71.1
4. Tanzania 49,639,138 84.884 42.3 70.6
5. Uganda 35,918,915 61.891 22.926 73.2
The EA Payment Players
Regional switches: UmojaSwitch, Kenswitch, Paynet, Interswitch, R-Switch and the newly anticipated National switch of Burundi.
• Mobile Network Operators: Vodacom, Tigo, Airtel, Safaricom, MTN, Zantel
• The Bankers Associations, ASBEA, the Central Banks
• The EAC
The EAC interoperability initiative
There are different initiatives for EA cross border
payments:
Mobile Money: Tigo TZ –Tigo RW, Vodacom TZ,
Safaricom KE
Switches: A meshed interconnectivity of regional
players to allow total regional interoperability.
The EAC interoperability roadmap: Driven by EAC to
ensure total local and regional interoperability
The EAC interoperability initiative
Interconnections of switches: Key Issues
- Technical: All switches connected to one another
- Operational issues: Operational procedures agreed and
signed between parties
- Settlement issues: Using ASBEA (Association of
Servings Banks in EA) members opening accounts
among each other. Later on, the use of EA payment
system (EAPS)
- Project Management: nominated team from each player
- Current Situation: All networks already connected,
testing in progress. Going commercially live before end
of the year.
The Future prospects in the region
• Chip card, EMV and NFC migration
• Total interoperability of all payment channels
• ATMs and POS ‘going rural’
• Rapid growth of banked community
• A hybrid of bank-MNO led agencies taking new shape
technologically (probably with ATMs)
• Strong political will, driven from EAC level
About Umoja Switch
Is a shared network of Payment systems connectingbanks and other players for the purpose offacilitating interoperability and ease of financialinclusion
• From 6 to 27 banks (more than 50% of all banks)
• From 30 to 210 ATMs
• From 3 to all regions in Tanzania
• From one service all possible payment solutions abank wants
About UmojaSwitch• UmojaSwitch is a company registered in Tanzania and 100% owned by member
banks, there are currently 27 member banks out of which 11 are shareholders.
Shareholding is open to every UmojaSwitch member bank; any member bank of
UmojaSwitch can become a shareholder by buying shares.
Vision• “To become the largest provider of electronic payment services across the country by
providing services which are reliable, affordable and accessible for the benefit and
convenience of its members and their customers”.
• Currently the network has over 200 ATMs distributed all over the country covering
both Tanzania mainland and the Isles (Zanzibar and Pemba)
Payment channels
• When it was established, UmojaSwitch was operating with only one channel i.e.
ATMs. However, due to change of technology and market demand, the Company is
now providing various other channels like mobile banking, Point of Sales (POS) and
agency banking.
Umoja Switch – Company Profile
Our Services
• Switching services
• ATM services
• Card Personalization
• Mobile banking
• Agency banking
• Institutional/retail payments
• Official Distributor of DIEBOLD ATMs in Tanzania
Our role – Keep sharing
UmojaSwitch
BanksVISA/MasterCard/
UnionPay
Agency Banking
Mobile Banking
POS network (Retail, Fuel)
EA Integration
Another Switch
ATM Network
BOT
Personalization Bureau
Phase I:
• Cash withdrawal,
• Balance enquiry,
• PIN change,
• Cheque book request,
• Mini statements,
• Intra-card transfer
Umoja Switch – Company Profile
Phase II:
• Inter-bank/Inter-card Transfer: Direct and real-time transfer from one account to another; same bank and
different banks
• Card-less Transfers: Transfer to a normal telephone number holder
• Mobile Banking: To allow bank customers to operate accounts directly from their mobile phones in a shared
environment allowing customers to perform various payments like utility bills, electricity and other biller
payments.
• Agency Banking: to provide technology and to facilitate technological sharing of bank agencies
• Point of Sale: Provision of retail and fuel POS
• Internet Banking: To allow bank customers to operate accounts directly from secure internet in a shared
environment
• Payment Transfer: Use of presence of shared infrastructure to facilitate payments across various sectors of the
economy e.g. customs, TRA
• Statement Request.
• Regional and International integration: Integration with other switches around East Africa as well as
facilitation of international transactions (VISA, MASTERCARD, UNION PAY etc.).
Products and servicesProduct provision for UmojaSwitch was categorized in
two phases
Our Role: Help the future—Share or impose exclusivity?
