Alliance for Financial Inclusion - In December 2009, there were an estimated 15 million mobile phones in Tanzania, with 45% of the population having access to a mobile phone. This growth in phone penetration spurred mobile network operators (MNOs) to launch mobile financial services to serve this rapidly growing customer base. At the end of 2009, more than 2.5 million Tanzanians had become mobile payment (m-payment) customers.

Mobile money services in Tanzania developed in a regulatory environment without a National Payment Systems Act and existing guidelines for electronic payment schemes did not provide adequate guidance on mobile financial services. When MNOs first approached the Bank of Tanzania (BOT) with proposals for providing m-payment services, the BOT advised them to partner with commercial banks to deliver these services. The role of the partner commercial bank would be to house a trust account in which MNOs would deposit m-payment funds. In this arrangement, the commercial bank (an entity traditionally under the jurisdiction of the central bank) would seek a “letter of no objection” from the BOT that would allow the m-payment service to operate. A company would then be appointed to oversee the account and the BOT would reserve the right to audit or check the trust account.

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