Poor or low technology level is one of the many factors that hinder people from accessing services from various financial institutions in Tanzania. This is because, today, the internet and mobile phone technology is expanding the potential for financial service customers more rapidly than any thing else; lack of it has a direct bearing on people's accessibility to financial services. Only 23% have access to the Internet and a very small 4% can access the Internet in rural areas.

These revelations are results of a national survey on demand for and barriers to accessing financial services. The report booklet with the findings of a financial survey in Tanzania was launched by Ms. Zakhia Meghji, Tanzania's finance minister last week in Dar es Salaam.

According to the report, there are other reasons why people are not using the financial system. On having a bank account for example, some think they do not qualify to have one, others say banks are inconveniently located or that the charges are too high. The Financial Sector Deepening Trust (FSDT) funded a collaboration of the FinMark Trust (FMT), Steadman Group and the National Bureau of Statistics (NBS) to conduct the survey in July-August 2006.

FSDT aims to help provide greater access for more people to a deeper financial sector, and encourage more people-particularly the poor-to use it.

Lengthy interviews were conducted with some 5,000 individuals, selected to provide a statistically representative cross-section of the populations of the mainland and Zanzibar. "The financial industry needs to educate its target markets if it wants to expand," reads part of the report.

The report shows that the highest percentage of people make their living from selling farm produce or running a small business (36% and 35% respectively ) Only 5% of the population claim to earn an income in the former sector.

Of those who are currently borrowing money, only 45% said that they have personal loan from a bank, but nearly ten times that number (38%) choose family or friends.

Savings and Credit Cooperatives (SACCOs) are slightly more popular, followed by Accumulating Serving and Credit Association (ASCAs) and Micro Finance Institutions (MFIs), but each market segment attracts a very low percentage of the total population.

Of those who borrow, men and women are almost equally prepared to ask for a loan from a kiosk (24% and 27% respectively). However, only 5% of men and 1% women secure loans from a bank, a number which decreases, if they live in rural areas. Loans in-kind are chosen by 23% of borrowers.

In-kind transaction are used much more in rural than in urban areas. When taking a loan for example, 84% of the rural population does so in-kind compared with only 16% in urban areas. Similarly, 80% in rural areas save in kind whereas only fifth of the urban population (20%) do so. Many goods are used for in-kind transactions including livestock and agriculture and items.

The study shows that when people want to transfer money around the country, they are seven times more likely to use a personal contact, and three times more likely to use a courier (usually a bus), than any kind of financing institution. Women use any method slightly less often than men.

East African Business Week