Security guaranteed for deposits of mobile money, declares BoT

Bank of Tanzania Governor, Professor Benno Ndulu

For every penny that a mobile phone depositor holds on their handset, commercial banks maintain a corresponding amount in their vaults for security reasons.

 

Bank of Tanzania Governor, Professor Benno Ndulu said in Dar es Salaam yesterday that the public should not fear keeping their money on their handsets or e-wallets because there is similar amount of money in trust accounts of banks.

 

“Money in trust accounts is what banks use for lending to earn interest which is paid to depositors later,” Prof Ndulu said after officiating a joint BoT/World Bank financial inclusion workshop. Prof Ndulu said every mobile phone service company which provides mobile money services has a bank as partner. 

 

He said Tanzania has successfully managed to include many people especially those from rural areas through mobile money because the government has put in place a conducive environment to encourage the service.“As a country we have put in place a conducive environment for mobile phone companies and banks to operate,” Ndulu noted saying the interoperability among mobile phone service companies has also assisted to boost growth in mobile money market.

 

The central bank chief further noted that mobile money services have significantly assisted increase the number of bankable people noting that a recent Financial Intelligence Unit report ranked Tanzania highly because of such progress.

 

“Today we have more than 270,000 agent banks countrywide compared to between 6-7 thousand physical branch network which all commercial banks have,” he noted.

 

World Bank Country Director, Bella Bird commended the country for making significant achievements in financial inclusion in the past five years saying such a move is important for growth. Bird pointed out that the country is on the right path towards having the majority of poor people access financial services.

 

 “It is important that majority of the people including the poor have access to financial services to spur growth,” Bird said.

 

She pledged World Bank’s continued support to the country in order to ensure that the sustained economic growth trickles down to the majority of rural folks where poverty is prevalent.

SOURCE: THE GUARDIAN