BoT calls for rural financial inclusion

The state of rural financial markets in Tanzania is characterized by low and decreasing availability of financing for both agricultural and non-agricultural
activities contends Bank of Tanzania.

Speaking during the inauguration of a rural microfinance conference themed ‘Accelerating rural and agricultural financial inclusion in Tanzania: Where are we,’ in Dar es Salaam on Wednesday, Bank of Tanzania Deputy Governor Juma Reli said Tanzania’s rural areas are characterized by a lack of viable financial institutions

“Our rural areas are characterized by a paucity of viable financial institutions and by lack of variety, breadth and range of financial services available…there is also very limited access to long-term financing needed for agriculture, land and other rural enterprises,” he said.

He told the conference, organised by Tanzania Association of Microfinance Institutions (TAMFI) in collaboration with Marketing Infrastructure, Value Addition and Rural Finance Support Programme (MIVARF), that because of the weak rural financial markets, traps have been created which reproduce poverty over time, depress the rate of rural growth and distort its income distribution consequences.

He called for a clear set of policy and for servicing of rural financial markets to get rid of high incidences of poverty in rural areas and growing income inequality between urban and rural markets.

In view of the said factors, he insisted the participants  look at the role of financial markets in relation to rural financial inclusion, the players, users, literacy, infrastructure, innovations in rural areas, as well as understanding the available opportunities and challenges for rural penetration to name but a few.

He also wanted them to look at the challenges of the warehouse receipt system in cooperatives and farmers and challenges in value chain financing and opportunities of using agricultural food processors and the effect of frequent government interventions in selling agricultural produce (export ban and food imports, tax free on crude imported cooking oil).

“We also need to ask ourselves how do we expand financial markets to be vibrant and thereafter bring financial services to the rural areas?” he urged.

With a high proportion of the Tanzanian population still living in the rural areas, he said it is imperative to develop an institutional framework to reach the hitherto un-served population with financial services.

He stressed that the reason for concern over limited financial exclusion is straightforward, access to a well-functioning financial system can economically and socially empower individuals to better integrate into the economy, actively contribute to their own development and enable them to protect themselves against economic shocks.

In his welcoming speech, TAMFI chairperson  Edmund Mkwawa said it is paramount to look at the challenges facing the rural economy as far as provision of inclusive financial services is concerned.


“We need to get an answer on how we can save our rural dwellers from poverty,” he said.