Rabobank in business

14-7-2008 | Other news

Availability of telephony has always been very limited in Tanzania, as is the case in many developing countries. Fixed lines are still rare by international standards, and growth only keeps up with the moderate economic progress. Delivering banking services through mobile technology means a giant leap forward in providing basic banking services for consumers in Tanzania’s emerging market.

Developing economies are cash-minded 
With regard to the consumer, Tanzania is still largely a cash-based society. Out of a population of close to 40 million, only a few million are bank account holders and they are used to converting their bank credits into cash immediately. The National Microfinance Bank (NMB) Tanzania customer-base counts around one million private individuals. Until recently these customers flocked to the bank for cash on payday, waited in line for two hours, withdrew all the money from the account, and did not return to the bank until the next payday.

ATMs create banking business
Customers’ behaviour has changed since the introduction of the ATMs to Tanzania. Most customers no longer withdraw their entire salary in one transaction, but they visit an ATM once a week instead. Ultimately, this is what the banking business is all about: registering balances on accounts and offering services to customers, then using their liquidity only when required. 

Mobile banking and ATMs will be the bank’s main channels
In Tanzania, mobile is where the action is. Recently, NMB introduced mobile phone airtime top-up service allowing customers to buy airtime on their mobile phone at the ATM. In the very near future, similar functionality will be introduced for public services like utility bill payments. These examples show that not only are mobile payment services the hotspot of action, but in a cash-based society, ATMs will play an increasing role.

Telecom kick-starts development
Availability of telecommunication facilities and making money transfers easy are prerequisites to kick-start economic development. Cash-back services, clearing between financial institutions and bill payments are all complementary services in which ATM networks and banks play an increasingly important role in both economic and banking development.

The telecoms sector, whether or not in co-operation with the government, has an important role in creating those connections across the country. Ultimately, the Tanzanian people will reap the benefits of a connected, developing society. 

The full article and more details are available in the current issue of the RaboCom Magazine published by Rabobank's Telecommunications, Internet and Media department.