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TANZANIA Financial Inclusion through Post

Office Outreach

www.posta.co.tz

Presented by Deos Khamisi Mndeme

Postmaster General & CEO

Tanzania Posts Corporation

Contents

Post Office in Financial Inclusion

Post Office Network

Financial Inclusion in Tanzania

About Tanzania

Strategy

The Tanzania Posts Corporation

Challenges

1. Introduction About Tanzania

• Location - East Africa along the Indian Ocean.

•Formation – A union of two sovereign states (Mainland and Zanzibar Islands).

•Area – The surface area is 945,203 square kilometers.

•Landscape – The Kilimanjaro, Ngorongoro, Serengeti and many others.

• Population – 47.4 million people of which 70% are estimated to be in rural and 30% are in urban areas.

•Economy – Agriculture accounts for about 40% of GDP, provides 85% of exports, and employs about 80% of the work force.

•Demographics – Percentage of young population between age of 15-35 years is 34.7%.

Source: National Bureau of Statistics (2012 Census)

Financial Inclusion in Tanzania

Financial Inclusion in Tanzania is still low

Only 17 % of adult population (about 3.7 million) had

access to bank accounts (2012)

Mobile Money:

31.8 million subscribers

11 million active users (48%)

2. Financial Inclusion in Tanzania

Institutional Arrangement:

Ministry of Finance and Planning steers implementation of national financial inclusion policy while the Central Bank of Tanzania (BOT) regulates financial sector.

The Tanzania Communications Regulatory Authority (TCRA) regulates Communication Services which includes Postal services, Telecommunication, Broadcasting and ICT services.

The Tanzania Financial Inclusion framework targets to enable 50 percent of adults to access formal financial services by 2016.

Adult Population with Formal Bank Accounts

Status in Tanzania

50% - Target

17% or 22% including SACCOS

12%

9%

2016

2012

2009

2006

Source: Tanzania Financial Inclusion Framework (A Public – Private Stakeholders Initiatives 2014-2016 )

3. The Tanzania Posts Corporation

Tanzania Posts Corporation (TPC) is the designated Public Postal Operator in the United Republic of Tanzania

Owned by the Government (100%)

Under the Ministry of Communications, Science and Technology, being regulated by the Tanzania Communications Regulatory Authority (TCRA).

Take note that the Postal Bank is an independent parastatal but it operates through the Post Office outlets under a commercial agency agreement.

4. Post Office Network

Office Number

Departmental Post

Offices manned by

permanent staff

164

Community

Information Centres

and Internet Cafes

37

Franchised Post

Offices

83

Sub Post Offices 65

Mail Delivery

Centres

36

Stamp Vendors 2,558

Post Office Network Continues..

Departmental District Post Office

Franchised Post Offices Stamp Vendor

Departmental Regional Post office

Sub Post Office

Post Office Network continues…

Office Type Service Offered

Departmental Post Office (DPO) manned by permanent staff

• Mails and Logistics, • EMS Courier and Express, • Financial and Agency Services

Community Information Centres and Internet Cafes

• ICT application services, • Photocopy and Secretarial services • sale of stationery, office and School equipments.

Franchised Post Office (FPO)

• Mails and Logistics, • EMS Courier and Express, • Collection of national examination fees with sale and payment of postal orders can be done on specific arrangements

Mail Delivery Centres (MDC)

• Mails and Logistics, • EMS Courier and Express, • Collection of national examination fees on specific arrangements

Sub Post Offices (SPO)

• Basic Mails and Logistics Services • Sale of postage stamps and postal stationary • Sale and payment of Postal orders

Stamp Vendors (SV)

• Sale of postage stamps and postal stationary • Receipt and delivery of ordinary mails on specific arrangements

Services Offered at Post Office:

Post Office Network continue…

Post Office network compared with Bank and Mobile Money outlets: Institution

Total Network size

Tanzania Posts

Corporation (TPC)

348 –comprising

DPOs,

FPOs, MDCs

& SPOs

Tanzania Postal Bank

(TPB)

27 + 115 post

offices

CRDB- Bank

73

National Microfinance

Bank (NMB)

140

National Bank of

Commerce (NBC)

53

Mobile Phone Companies

17,000

Source: Interviews during the mission and bank websites

Tanzania Banking Survey by Serengeti Advisers 2012

TPC is present in all districts and some wards through 348 post office outlets. The postal network although larger is not enough to compete in mobile financial services. If post office utilizes effectively the mobile technology it will reach out the unbanked population.

Source ESRF Discussion Paper field data 2009

%

5. Post Office in Financial Inclusion

Financial Services Posta Cash -Electronic

Money Order

Money Fax

Post Giro (Dividends

and Pensions)

Express Money Order

Postal Orders

International Money

Orders (IFS)

Bureau de Change

Financial and

Agency Services

Agency Services Agency Banking

(TPB & CRDB)

Money Transfer (Western Union, Money Gram,

Mobile money)

Sales of Electricity Token

Phone Cards/Recharge

vouchers

Insurance Agency (Premium

Collections)

Collection of National

Examination Fees

The post office in Tanzania plays a role in financial Inclusion by providing the above financial services. In 2013, about 18,000 customers were serviced in financial services and 300,000 in agency service this is an increase of 80% and 21 % respectively compared to previous fiscal year(2012).

6. Challenges

Fundamental challenges hindering the role of Post office in Tanzania in the extension of Financial Inclusion are: Lack of full information about clients so as to design appropriate products (know your customers – KYC) Problem of liquidity(availability of adequate cash) in Post office outlets in the rural areas.

Financially viability of post office outlets in rural areas

Underdeveloped public infrastructure e.g. lack of electricity, ICT connectivity etc. Lack of suitable business model and modern technologies which suit the needs of different segments of consumers. Safety and security in the financial services transactions e.g. safeguard of cash, cyber related crimes etc.

7. Strategy (Swift Move into mobile Technologies)

E-Payments Carried Out with

Banking Partners

Mobile Payments – Mobile money

Transfer, mobile settlements

E-Government – Creating Access

bridging the gap to offer e-services

Under one stop centre (Post Office)

End to end

E-payment

solution

Leveraging on technology to develop new revenue streams, by linking the post office with mobile phone companies and banks to improve electronic money transfer and online payments.

Strategy Continues…

TPC strategy is to extend its network by partnering with mobile phone companies and banks or financial institutions. Through this collaboration post office outlets will be able to expand its outreach through retailers (Mobile phone agents).

Post Office

Outlets

Develop or Customize

Module to Integrate all

Players, Banks and

Mobile

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