Decoding Digital: A Deep Dive into Tanzania’s Fintech Ecosystem

Can digital financial services and fintech realize their potential to accelerate financial and digital inclusion in Tanzania, transforming lives and the digital economy?

A new publication from the UN Capital Development Fund (UNCDF) explores the challenges and opportunities for increasing demand for digital financial services and building an inclusive digital economy. The publication, titled ‘Fintech for Who? Demand for Digital Financial Services and Fintech in Tanzania’ is part of the European Union (EU) Digital4Tanzania (D4T) program jointly implemented by Tanzania’s Ministry of Information, Communication, and Information Technology (MICIT), EU Member States, and UNCDF. The publication was also supported by the Tanzania Commission for Science and Technology (COSTECH), who provided comments and insights throughout the research process.

Offering an in-depth exploration of the rise of fintech in Tanzania, the publication sheds light on the status of the digital financial landscape while emphasizing the potential it holds. Moreover, it delves into the intricacies of consumer demand, examining the intertwined dynamics of perceived cost, perceived usefulness, ease of use, perceived risk, and the impact of social norms on the adoption of fintech services.

Caroline Morrow, UNCDF researcher and author of the report, said, “The DFS and fintech landscape in Tanzania is evolving rapidly. There is strong potential for fintech to accelerate continued progress in financial inclusion, especially at the last mile, but this requires a comprehensive understanding of consumer needs and behavior, along with products and services that meet those needs. This publication endeavors to identify ways in which we can get there.”

Jose-Luis Gonzalez, EU Delegation Programme Officer, further added, “In an age where digital solutions are pivotal to achieving many development outcomes, it is imperative to ensure they are accessible, affordable, and relevant to every Tanzanian. This report not only provides invaluable insights but will also help chart a roadmap towards a more inclusive digital future.”

Some highlights from the publication include:

• A thorough exploration on the drivers of demand for digital financial services and fintech in Tanzania, providing a comparison with other countries in the region and advanced economies.
• Recommendations on how to address challenges faced by fintech providers, especially on understanding and catering to consumer needs.
• Insights into societal norms, particularly gendered social norms, that influence the adoption and use of digital financial services.

While fintech in Tanzania is poised for significant growth, sustained efforts in understanding and addressing the myriad factors influencing demand are essential. This publication lays the foundation for a coordinated effort towards a more inclusive and robust fintech ecosystem in Tanzania.

Download the full report here