Tanzania: Citibank Eyes Phone Banking

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Citibank Tanzania is looking into possibility of hooking mobile-phone banking into its system to ease financial transactions to bank-less society, most in remotest areas. At the moment, the bank said, a number of NGOs in the country cannot extend their services to the rural area effectively because there are no banking facilities amid high risks.

And, whenever rural financial infrastructure is available, the accessibilty is limited to most residents; thus increase the risk of providing services as institutions -- mostly NGOs --have to deal with hard cash.

The Citibank, Global Transaction Services Head, Vice-President, Nassoro Hamza, said on that the bank is currently looking into possibility to lend a leaf from Kenya's M-Pesa to enable reaching the bank-less populace.

"This is a most challenging situation NGOs are facing when trying to reach the rural people," the Vice-President said adding: "It's our intention to share the development with M-Pesa and introduce mobile (phone) banking in the market."

A recent Finscope--Tanzania survey said less than 10 per cent of Tanzanians access banking services. The survey says more than half million Tanzanians stopped using banking services between 2006 and 2009.

Hamza told the 'Daily News' at the sideline of the Citibank's Leadership Forum - Sharing Trends in Donor and NGO Financial Best Practice that pulled 25 NGOs' most umbrella.

NGOs also are facing other challenges including exchange rates, which impacted their businesses, and payment to ultimate beneficiaries who most are bank-less. Most NGOs are receiving funds from abroad in US dollar or Euro or Canadian dollar but may find themselves incurring losses because of fluctuations.

"Citibank wants to provide with an e-system (to NGOs) that enable effecting the payment, check the status and generate report out of payments and reconcile transactions at the client's base -- free of charge," Hamza said.

Citibank Corporate Banking Director, Gasper Njuu, said the NGOs are not allowed to hedge their funds against currencies' fluctuations-- "not to speculate". The banks said it will offer next to none competitive rates, advisory and first hand global and domestic foreign exchange market information to enable NGO make decisions swiftly. Most participants agreed that the exchange rate, risk to transport money to the remotest areas, paperwork are the main challenges that are faced and drawback to NGOs effort to serve the masses.

The bank organised the forum to get first hand information that NGOs are facing in the country when executing their duties --from the time their received donors' moneys, disbursed to beneficiaries to reporting back.