Introduction and Overview
Financial inclusion facilitates an inclusive financial sector where individuals and businesses have access to and usage of a broad range of affordable and quality financial products and services that improve financial well-being and livelihood.
Financial inclusion and deepening support the Bank of Tanzania to achieve its mandate of ensuring effective implementation of monetary policy, enhance financial integrity and stability for conducive and sustainable development of the national economy.
The Bank as the Secretariat of the National Financial Inclusion Council implements and coordinates financial inclusion initiatives earmarked under National Financial Inclusion Frameworks through public and private sector collaboration and partnerships. Also, the Bank is mandated to protect consumers of financial products and services for regulated entities under the Bank’s purview.
Tanzania has recently witnessed a remarkable transformation in the financial sector, leveraging the rapid growth of the adoption of technologies in developing and distributing financial services and products. Despite these developments, the adult population's access to and usage of formal financial services remains unevenly distributed across the country.
To address this challenge, Tanzania embarked on a national collaborative approach between the public and private sector in advancing policies and innovative financial solutions that expand outreach to unserved and underserved communities in the country. Implementing these efforts, among others, helped increase access to and usage of formal financial services in Tanzania. According to the Fin-Scope Survey 2023 results, the level of access and use of formal financial services increased to 89% and 76% in 2023 from 86% and 65% in 2017, respectively. However, despite the success, the level of exclusion remains high for population segments such as rural residents, smallholder farmers, youth, and women.
Financial stability is a condition in which the financial system comprising financial institutions, financial markets and financial market infrastructures can withstand shocks and the build-up of financial imbalances, while continuing to provide essential financial services to households, businesses and the wider economy.
A stable and well-functioning financial system supports sustainable economic growth by ensuring that financial intermediation takes place efficiently and without significant disruptions. It enables households and businesses to save, borrow, invest, insure, make payments, manage risks and plan with confidence.
Financial stability is not merely the absence of instability. It requires a financial system that is sound, resilient and capable of absorbing adverse shocks while continuing to perform its core functions, even during periods of stress.
Financial systems are highly interconnected, and the failure or distress of a financial institution, market or payment system can spread quickly to other parts of the financial system. Maintaining financial stability is a key responsibility of central banks and financial sector regulatory authorities. This involves the continuous identification, assessment and monitoring of vulnerabilities and systemic risks within the financial system, as well as the implementation of appropriate policy measures to mitigate such risks and strengthen the resilience of the financial sector.
