Having personally witnessed the emergence and rise of fintech services in Tanzania and
interacting with most of the solutions firsthand on a daily basis gives me so much hope for the
potential fintech holds for harmonising and democratising access to financial services across the
length and breadth of the country and beyond. When you walk into local markets and kiosks
(called kibanda here in Tanzania) in remote communities and see most small business owners
collecting payments from their customers through mobile money, it shows you how fast fintech
is already deeply rooted in driving inclusive financial services and building financial bridges
between urban and rural communities through seamless payment and cashless solutions.
In Tanzania, very often you will find most retail financial products and services are already being
offered by fintechs, either by big corporations like banks and telcos or by other emerging fintech
startups from within and outside Tanzania.
According to TCRA, mobile money transactions hit a record high of $60.2 billion (TSH 140.9
trillion) in 2022, experiencing tremendous growth from 2021, seeing mobile money accounts
grow from 39.9 million to 40.9 million accounts, with transaction value growing by 3%. This
shows how Tanzanians are fully embracing digital payments and other financial products on
mobile technologies as the way forward for building a well-connected financial ecosystem across the country.
With the number of mobile phone users reaching 54 million and internet users approaching 30
million, the Tanzanian market shows significant strength to become one of the largest fintech
hubs in Africa. Coupled with the youthful population, market readiness, growing demand for
financial services digitization, and government efforts to streamline regulatory processes to
accelerate uptake of fintech solutions, the future of fintech in Tanzania is surely looking
In this piece, I will touch base on a few fintech drivers in Tanzania’s financial ecosystem,
looking at payments, digital savings and lending, ecosystem initiatives, government support,
finance operating systems for businesses, and open banking solutions.
With the rise of MPesa and other mobile money operators like Tigopesa, Halopesa, Airtel
Money, and T-Pesa, Tanzania continues to record year on year growth in digital payment
transactions. This is clearly visible through payment integrations, connecting banks, mobile
money and debit cards to facilitate digital payments. In recent times, we have seen major banks
such as NMB launching NMB Mkononi, CRDB SimBanking, and other banks following the
same pathway to digitising payment services. The country’s digital payments are expected to
exceed $3 billion, owing to the rapid adoption of cashless payments by merchants, institutions,
and businesses. Also, some exciting fintechs like NALA, Remitly, WISE, AzamPay, Fluterwave, and Palmpay are coming into the country with a range of other fintechs and are leading remittance and payment services in the country, which are also major contributors to the crucial strides we see in the fintech space in Tanzania.
Digital Lending and Savings
Most retail borrowers are now turning to digital lending to get a “quick fix” and move on with
their lives. Digital lending is now famous and undoubtedly one of the most convenient ways to
access microinstant loans. Major telcos like Tigopesa, MPesa, and Airtel Money have launched
digital lending products – Songesha for MPesa, TIMIZA for Airtel Money, and Nivushe for
Tigopesa. These lending services, alongside fintechs like Branch and Haba, are shaping the
future of microlending in Tanzania. Ramani is reimagining supply chain financing through their
in-demand inventory financing for SMEs in Tanzania, thereby helping SMEs access products on
credit through a well-managed credit facility. Between 2018 and 2022, over Tsh 600 billion was
disbursed by mobile money operators in Tanzania, contributing about 1.2% of the total loan
disbursed by financial institutions within those periods.
Also, fintechs are now gradually creeping into offering attractive savings products with better
returns than what is seen in traditional banks. Saving solutions like M-koba and M-Pawa provide
seamless savings options for individuals and groups. In the near future, we will see more fintechs incorporating savings accounts into their product offerings to increase the savings appetite of their customers.
Ecosystem Initiatives and Government Support
The Tanzanian startup ecosystem is not relenting in providing relevant capacity building for
scaling fintech solutions in the country. One of the initiatives launched by UNCDF, PesaTech
Accelerator, was implemented by Sahara Ventures, a fintech accelerator that is supporting
selected fintech startups to commercialise and become investor-ready. This initiative is critical to
nurturing the fintech pipeline and grooming innovative solutions that are solving the most critical
financial services challenges in the country. Other initiatives focusing on providing a sandbox for
fintechs to test and validate their businesses are being pioneered by banks like NMB Sandbox,
CRDB Sandbox, and other infrastructure support made available for fintechs to build upon and
go to market faster.
The government is at the forefront of providing an enabling environment for fintechs to launch
and scale their ventures through government initiatives such as the free USSD Code from TCRA,
BOT Regulatory Sandbox, and hosts of other government initiatives that are fueling the success
of fintechs in the country. The formation of the Tanzania Fintech Association is another
milestone that is quickly gaining important traction in the ecosystem and helping its members
navigate through compliance and market challenges.
Operating Systems for Businesses and Open Banking Solutions
Another booming financial service space is building financial operating systems for businesses to
seamlessly manage their transactions. These include payment gateways, bookkeeping and
inventory systems, PoS, BNPL, and open banking APIs. Fintechs building along this line are
gradually changing consumer behaviors, creating alternative credit scoring systems for
customers and businesses, connecting the informal sector to financial services, and bridging the
data gaps in the financial ecosystem. I have come across exciting startup buildings in this space,
and I would like to mention a few: TemboPlus is offering an open banking API to fintechs and
businesses to quickly launch their businesses without going through a tedious licensing process.
TemboPlus is helping startups launch faster and gain market traction. Swahilies is providing an
operating system for SMEs to collect payments, set up bank accounts, and manage all their
transactions on one platform. In a short while, they are already serving thousands of SMEs in
Tanzania, EvMAK, BDO, Selcom, Linkd Card, and other payment gateways are connecting
Tanzania to other payment ecosystems across the world, helping Tanzanian businesses receive
payments from clients globally. Tunzaa is helping consumers pay in installments for products
securely and get them after completing the installments. This is shaping how people purchase
products and manage their finances.
We see strong appetite from investors in Tanzania’s fintech space. The likes of NALA have
raised over $10M to scale their services across the regions; Ramani has raised $32M to continue
financing the supply chain for Tanzanian SMEs, TemboPlus also raised money from Hustle
Fund, Hoaq, and other investors to build open banking infrastructure for Africa’s businesses.
Swahilies raised from the Baobab Network to continue scaling their operating system for SMEs.
Credable raised $2.5 million for its digital banking infrastructure, which allows businesses to
offer banking products to their customers. Tunzaa received investment from Startup Wise Guys
to scale their solution across the country. These and many other fintech companies in Tanzania
have proven that the ecosystem is ripe to attract global investors to one of the largest tech hubs in Africa. Also, having venture funds locally that are specifically investing in Fintech provides a
boost to local capital access for fintechs. The likes of Warioba Ventures, SBAN, and UNCDF are
playing an important role in financing fintechs in Tanzania.
In my last remarks, I would say that I am super pumped for the potential of Tanzania’s fintech
market. With Tanzania being situated strategically within the region, I see strategic expansion of
the country’s fintech services into neighboring markets and spreading throughout the continent.
As the government continues to improve the regulatory framework and help fintechs have a soft
landing in launching and scaling their startups, the fintechs are also focusing on strengthening
their data protection systems, improving their KYC processes, and building strategic alliances to
close financial gaps in the country through technology.