17 May 2007 W ork shop for Bank Indu st ry

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2 1. Registration of Participants 2. Introduction to FinScope, Annette Altvater, TD of FSDT 3. Workshop: Findings and Discussion Bob Currin FSDT consultants Oswald Mashindano - ESRF 4. Moving forward, Annette Altvater, FinScope Coordinator

3 Annette Altvater Technical Director FSDT

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5 First national consumer perception survey: Individuals views of total money management Formal and informal services Attitudes and behaviours Credible, robust, scientific approach Comprehensive market landscape rich to poor for total market understanding Proven multi-nation study within Africa

6 Support for Government development initiatives Insights for commercial service providers (including MFPs), NGOs and development agencies to innovate services and products Allows planning and interventions focused on specific market strata and segments

7 Methodology Sampling Sample achieved Reporting domain Confidence level Field dates Qualitative research Quantitative research National Master Sample Plan national estimates Listing & selection of respondents done by NBS 16+ 4,962 Results weighted to projected population Urban/rural and gender 95% August September 2006

8 Share findings facilitate learning Engage debate Catalyse change and innovation Support effective market development Galvanise market structures

9 Why FinScope? Stratified market intervention MARKET PROVISION STATE PROVISION SAVINGS CREDIT TRANSACTION BANKING ENTERPRISE FINANCE Social Grants Tax Relief Subsidies Development assistance HOUSING FINANCE INSURANCE

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11 Collected interest areas and queries registration forms and meetings Analysis of data by FSDT, consultants and ESRF Creation of a lens for quick referencing Creation of appropriate context for the information Specific market dynamics reviewed via

12 Population Profile: Population characteristics Geographical concentrations of people & issues Gender issues Perceptions Infrastructure and amenities Rural/Urban perspectives: Semi-formal and informal categories explained Rural population needs & services to reach them Demand and use of credit facilities in rural areas

13 Product & Services contd. In-kind savings and in-kind loans Co-operatives market SACCOs Micro-finance Savings, borrowing Access: Barriers to access physical, non-physical & socio-economic Access costs & perceptions General Money Matters Financial literacy and impact on uptake Policy and legal impacts

14 Poverty Lens Access Strand and frontiers Population profiles & perceptions

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16 Total adult population 16 years & older = 21 million people 57% of adult population under 34 years of age The urban/rural split of this population group is 28% and 72% There are more women than men in both urban and rural areas

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18 72% 48% 52% 28% 29% 22% 19% 6% 11% 13% Urban Rural Male Female Years Years Years Years Years 55+ Years

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21 Employed in the formal sector Employed to do other people's domestic chores Employed in the informal sector Agricultural trading-buying and selling produce 4% 4% 5% 6% Employed on other people's farm on a seasonal basis Sell output from my cattle/livestock 8% 9% Sell my livestock Sell own produce from my farm, cash crop 11% 12% Money from family/friends / spouse 28% Running your own business Sell own produce from my farm, food crops 35% 36%

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23 Total adult population

24 Total adult population

25 Total adult population

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28 Insuring/covering your assets 79% How to manage your money effectively 80% Understanding banks, M FIs or Saccos charges/fees Insuring/covering your life 81% 81% How to open an account in a bank Understand the services/products provided by financial service providers 82% 82% How much of a loan you can afford to apply for 83% How to save more money How interest rates work/calculated 84% 84%

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30 NGO Office 14% Formal Bank 20% Post Office 25% Secondary School 43% Police Station 43% Produce Market/ Food Market 62% Primary School 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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32 Education Fuel for cooking Drinking water Toilet type Material for house construction EQLI

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42 Access Strand - Service provider market composition Formally served Formal institutions Semi-formal SACCOs and MFIs Informal associations or groups Financially excluded

43 Access to financial services by categories Formal - 9% Semi-Formal - 2% Informal - 35% Excluded - 54% 1 9% 2% 35% 54%

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45 Access to financial services by segmented categories Formal - BI - 9% Formal Other - 1% Semi-Formal (SACCO) - 2% Semi-Formal (MFI) - 1% Excluded (Totally Unserved) - 34% Informal - 35% Excluded (Non monetary) - 20% 1% 1% 1 9% 35% 20% 34% 2% Percentages rounded up

46 Access to financial services by categories Urban/Rural Formal - BI Formal Other Semi-Formal - SACCO Semi-Formal - MFI Informal Excluded - Non monetary Excluded - Totally Unserved 2% 0% Rural 5% 36% 24% 33% 0% 1% 2% Urban 18% 32% 11% 34% 1% Percentages are rounded up

47 Access to financial services by categories - Gender Formal - BI Formal Other Semi-Formal (SACCO) Semi-Formal (MFI) Informal Excluded (Non monetary) Excluded (Totally Unserved) 1% 1% Female 6% 38% 19% 35% 0% 2% 1% Male 12% 31% 21% 32% 1% Percentages rounded up

48 60% 50% 51% 40% 30% 28% 20% 17% 10% 0% Make Decisions Alone In Consultation-Partner In Consultation-Other Family 2% Do Not Make These Decisions

49 Male Female 60% 50% 53% 50% 40% 30% 29% 28% 20% 16% 18% 10% 0% Make Decisions Alone In Consultation-Partner In Consultation-Other Family 2% 3% Do Not Make These Decisions

50 Urban Rural 60% 50% 49% 52% 40% 30% 30% 28% 20% 18% 16% 10% 0% Make Decisions Alone In Consultation-Partner In Consultation-Other Family 2% 2% Do Not Make These Decisions

51 Formally Included Semi Formal Informally Included Excluded In Consultation-Other Family 8% 2% 33% 58% In Consultation-Partner 12% 3% 39% 45% Make Decisions Alone 7% 2% 34% 57% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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53 Pension 1% Domestic work 2% Employed in Formal sector 3% Do not receive income 4% Sub-Letting land/house/rooms 4% Employed in Informal sector 6% Money from Friends/Family 18% Running own business 23% Agriculture related 38% 0% 5% 10% 15% 20% 25% 30% 35% 40%

54 FI - Formally Included SI - Semi Formal II - Informally Included E - Excluded Money from friends and family Selling crops Formal employment Running own business 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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56 FI - Formally Included SI - Semi Formal II - Informally Included E - Excluded University Post Secondary Training Secondary Post Primary Training Primary Pre-primary No Formal Schooling 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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62 by financial service provider: Banks Saccos MFIs

63 Percentage of Tanzanians obtaining saving or loan from: Bank, SACCO or MFI 60% 53% 50% 40% 30% 30% 20% 17% 10% 0% Saving and Loan Bank Saving and Loan SACCO Saving and Loan MFI

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66 People with a bank account who either save or borrow from a SACCO or MFI Saving Loan 25% 20% 15% 10% 5% 0% 22% SACCO 15% 13% MFI 7%

67 Tanzanians with a bank account who are served by informal service providers, MFIs and SACCOs Total Urban Rural 60% 50% 48% 47% 49% 42% 40% 30% 26% 20% 10% 15% 15% 17% 12% 0% Informal financial services % SACCO borrowers and savers % MFI borrowers and savers %

68 Urban - rural split of clients of different categories of financial service providers Urban Rural Informal financial services MFI savers and borrowers Banked SACCO borrowers and savers 30% 71% 55% 45% 61% 39% 31% 69% 0% 20% 40% 60% 80% 100%

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70 Currently Banked Previously Banked Never Banked 1,609, ,976 18,859,849

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72 Currently Banked Previously Banked Never Banked 55+ Years 12% 13% 26% Years 11% 13% 17% Years 12% 19% 27% Years 29% 28% 30% Years 13% 15% 23% Years 2% 5% 6% 0% 5% 10% 15% 20% 25% 30% 35%

73 Currently Banked Previously Banked Never Banked University 0% 1% 7% Post Secondary Training 0% 8% 19% Secondary 8% 25% 41% Post Primary Training 2% 2% 6% Primary 23% 54% 57% Pre-primary 4% 2% 14% No Formal Schooling 1% 4% 15% 0% 10% 20% 30% 40% 50% 60%

74 Urban Rural 80% 75% 70% 60% 61% 55% 50% 45% 40% 39% 30% 25% 20% 10% 0% Currently Banked Previously Banked Never Banked

75 Currently Banked Previously Banked Never Banked Do not receive income 1% 0% 99% Domestic work 3% 3% 94% Sub-Letting land/house/rooms 6% 21% 73% Running own business 4% 10% 86% Employed in Formal sector 7% 20% 73% Employed in Informal sector 3% 10% 87% Agriculture related 3% 4% 93% Money from Friends/Family 3% 7% 90% Pension 28% 27% 45% 0% 20% 40% 60% 80% 100% 120%

76 Income (groups) of people with a bank account TSHS P/M, 10% TSH 1 to 5,000, 1% TSH 5001 to 20,000, 6% TSH 20,001 to 50,000, 13% TSH 100,001 to P/M, 19% TSH 50,001 to 100,000, 27%

77 8% 7% 7% 6% 5% 4% 3% 2% 2% 2% 1% 1% 1% 0% ATM Card Debit Card Postbank Account Current Account Savings Account 0% Fixed Deposit

78 60% 50% 52% 40% 30% 20% 10% 17% 13% 9% 5% 4% 0% Savings Account ATM Card Postbank Account Debit Card Current Account Fixed Deposit

79 In The Branch Through Cellphone Banking Through An ATM Via The Internet No answer Means Of Drawing A Cheque 88% 0% 5% 1% 6% Means Of Paying Acc To Third Party 83% 3% 8% 2% 4% Means Of Transfering Money Between Banks 87% 0% 5% 6% 1% Means Of Buying Bankers Cheques 81% 1% 5% 0% 12% Means Of Doing Cheque Deposits 89% 0% 4% 0% 6% Means Of Doing Cash Deposits 96% 0% 3% 0% 1% Means Of Doing Cash Witdrawals 76% 0% 22% 0% 1% Means Of Checking Acc Balance 80% 2% 16% 2% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

80 Perceptions on Banking Operations Would rather deal face to face w ith a person than w ith an electronic device Would rather deal w ith people you know than w ith FI If you save and invest regularly, eventually the sm all amounts w ill mount up You trust your ow n experience/know ledge rather than the advice of others Taking loans should be avoided Can easily live w ithout form al banking institutions Shop around for best interest rates 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Agree Disagree DK

81 Banks force you to use the ATM Upon receiving an account statement, you check the details Prepared to learn how to use new technology eg ATM Don't trust informal associations Would like to start your ow n business but can't get a loan Most services offered re also available from Non-bank FI Young people know more 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Agree Disagree DK

82 Financial Products Used

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84 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 19% 17% 13% 4% 2% 2% 1% 1% 1% CRDB Bank Tanzania Postal Bank NBC Limited Akiba Commercial Bank Stanbic Bank The People's Bank Of Zanzibar Barclays Bank Dar Es Salaam Community Bank Exim Bank

85 Must Keep Min. Balance In Bank Prefer Alternative Fin.Services Banks Not For People Like Me Don't Need A Bank Account Don't Have A Referee Takes Too Long To Get Money No Documents To Open Acc. Don't Qualify To Open Account Prefer Dealing In Cash Have Too Little Expensive To Have Bank Account Bank Is Too Far From Home Bank Charges Are Too High Don't Know How To Open Account Do Not Have A Job Don't Have Money To Save Don't Have A Regular Income 4% 4% 5% 5% 5% 6% 6% 9% 11% 16% 16% 19% 19% 20% 27% 32% 60% 0% 10% 20% 30% 40% 50% 60% 70%

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88 Banked Unbanked 40% 35% 36% 30% 27% 25% 21% 20% 17% 15% 10% 12% 11% 14% 10% 8% 8% 8% 7% 9% 11% 5% 0% TSh TSh TSh TSh TSh TSh TSh TSh TSh TSh TSh TSh TSh TSh

89 based on education

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92 The concept lines of saving/investing and insuring are blurred

93 Tanzanians save to make provisions or insure themselves in case of certain events Social Reasons (Wedding) Education Of Self, Child and others To Leave Something For Child For Later In Life/Old Age 8% 10% 11% 14% Emergency (Burial Medical 28% Meet HH Needs-Little/No Money 37% 0% 5% 10% 15% 20% 25% 30% 35% 40%

94 How Tanzanians who save keep their savings Other With An ASCA With Group At Workplace Through Insurance Schemes Employer Savings Schemes Businessman For Safekeeping At Microfinance Institution Account At SACCO Complusory Savings Ex NSSF/ZSSF With A Merry -Go- Round Given To Family/Friend To Keep Keep In Secret Hiding Place Savings In Kind Eg. Livestock 2% 2% 2% 2% 2% 3% 3% 6% 6% 12% 15% 54% 68% 0% 10% 20% 30% 40% 50% 60% 70% 80%

95 Forms of savings in-kind of people who save RTA 4% Clothing 9% Agricultural Inputs - Eg. Seeds Household Items - Eg. Salt, Soap Means Of Transport -Eg. Bicycle Entertainment Items-Eg. Radio Food Agricultural Produce 13% 16% 18% 22% 23% 27% Livestock - Eg.Goats And Cows 41% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

96 Benefits for keeping savings in-kind of Tanzanians who save Can Avoid Paying Tax RTA Adds To Comfort Of Living Able To Pay For The Goods Makes It Easier To Do Business For Transportation Purposes Security Easier To Meet Your Obligation For News/Entertainment Purposes Can Exchange For Goods/Servicese Better Returns Than Investment To Keep Item&Sell At Later Date 31% 0% 5% 10% 15% 20% 25% 30% 35% 13% 14% 17% 4% 5% 7% 18% 19% 20% 21%

97 Access to financial services of people who save in-kind FI - Formally Included SI - Semi Formal II - Informally Included E - Excluded 1 9.6% 2.6% 47.7% 40.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

98 Demographics of people who save to insure themselves for certain events 80% 73% 70% 60% 50% 48% 52% 40% 30% 20% 10% 27% 5% 22% 32% 19% 11% 11% 0% Urban Rural Male Female Years Years Years Years Years 55+ Years

99 Level of education of Tanzanians between years who save to insure themselves for certain events RTA Post Primary Training Post Secondary Training 2% 2% 3% Pre-primary Secondary No Formal Schooling 8% 12% 12% Primary 60% 0% 10% 20% 30% 40% 50% 60% 70%

100 Reasons for never having saved or invested No Relevant Documentation You Need A Referee Difficult To Use Or Access Too Young To Contract Time Consuming To Participate Cost Of Service/Getting There Can't Qualify Not Available In This Area Unaware Of Products Don't Understand How Serv. Work Facility Not Nearby Live For Today Needing Lump Sum To Start With Poor Or Low Returns Don't Have Start Up Money Having Money To Save 1.60% 2% 2% 2% 2% 2% 2% 3% 3% 4% 4% 5% 6% 15% 20% 22% 0% 5% 10% 15% 20% 25%

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102 Loan From Informal Lender Personal Loan From A Bank Business Loan 3% 4% 4% Loan From Microfinance Instit. Loan From ASCA 6% 6% Loan From A SACCO 9% Loans In Kind-Eg. Livestock 23% Credit From A Kiosk 33% Loan From Family/Friend 38%

103 Sources of borrowing split by urban/rural 39% Urban Rural 35% 27% 13% 11% 13% 8% 7% 8% 3% 3% 2% Loan From Family/Friend Loans In Kind-Eg. Livestock Loan From A SACCO Loan From Microfinance Instit. Business Loan Personal Loan From A Bank

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105 Reason for borrowing money Purchase Of Land % Social Reasons % Pay Off Debts % Purchasing Means Of Transport % Increase Your Bank Balance % Expanding Business % Purchase Of Livestock % Emergency % Farming Activities % 2% 2% 3% 3% 3% 4% 4% 4% 6% Building Or Improving A House % Meeting Day To Day Expenses % Setting Up A Business % Educate-Self, child, sibling, other 9% 10% 10% 11% Acquiring Household Goods % 12% 0% 2% 4% 6% 8% 10% 12% 14%

106 Reason for never having applied for a loan Spouse/Partner Won't Allow It Too Young To Qualify Don't Have Identification Don't Have A Guarantor/Referee Don't Believe Paying Interest Don't Have Any Collateral No Place Nearby To Go Get Loan They Charge Too Much Don't Know Where To Get Loan Fear Not Enough Money To Repay Never Needed It Don't Have Enough Money 3% 4% 4% 8% 9% 12% 15% 16% 22% 29% 31% 32% 0% 5% 10% 15% 20% 25% 30% 35%

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108 Saving in Kind Loans in Kind Remittances in Kind 84% 80% 70% 20% 16% 30% Urban Rural

109 24% 16% 14% 13% 10% 9% 8% 5% Livestock - Eg.Goats And Cows Agricultural Produce Food Entertainment Items-Eg. Radio Means Of Transport -Eg. Bicycle Household Items - Eg. Salt Agricultural Inputs - Eg. Seeds Clothing

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111 Urban Rural 19% 11% 11% 6% 2% 4% using an financial institution using a courier company Through a personal contact

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114 Have Own Cell Phone-Contract 6% No C/Phone, don't use others 22% Have own cell Phone-Prepaid 25% No C/Phone, use someone else's 29% Access 2 Mobile S/Prov. Payph. 41%

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117 Area based sampling Allows modelling and mapping of data Overlay supply-side data with demand data Determine market gaps Better utilisation of resources

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119 Summary on Challenges of Financial Markets By Oswald Mashindano Economic & Social Research Foundation (ESRF)

120 Impediments to Financial Markets Low levels of financial literacy Poverty as a barrier Rural dwellers are generally poorer than their urban counterparts Poorly developed infrastructure Roads, communications, electricity, transportation etc

121 A combination of these factors leads to Lower participation and poor financial accessibility Increased transaction costs per monetary unit of financial intermediation; Increased risks for any financial institution attempting to serve rural clients; Formal financial institutions largely avoiding serving rural areas; Financial services available are provided by informal agents or mechanisms which offer a narrow range of financial services to limited customers.

122 1. Summing up 2. Dissemination strategy Annette Altvater FinScope Coordinator FSDT

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124 The FinScope dataset: contains the universe of information To be used by institutions and individuals able to analyse market research information FinScope key findings: analysis which makes sense of the data Users need information tailored to their specific interests or market challenges

125 Key findings: initial analysis presented at the FinScope Tanzania launch - April 2007 Currently: research institutions and consultants mine the dataset, present more analyses and workshop the application of these analyses Materials are published on the FSDT dgroup website brochure, analyses and presentations. launch

126 Intermediate dissemination between April and June 2007 In-depth analysis and workshops. The FSDT will: host workshops for some market segments facilitate local market research capacity develop the means, (possibly including subsidies), to assist users to buy or use analytical services to apply the findings

127 Date Market segment Subject of analysis Institutions invited 3 May 2007 Donors and development partners Support and promotion of pro poor financial services Donor agencies 4 May 2007 Government Policy and regulatory issues Government agencies 16 May 2007 Insurance industry Client profiles and preferences, useful information for financial sector deepening Insurance companies and Insurance authorities 17 May 2007 Banking industry Client profiles and preferences, useful information for financial sector deepening Commercial Banks and Community Banks, TIOB

128 Date Market segment Subject of analysis Institutions invited 6 June 2007 Cooperative movement Client profiles and preferences, useful information for financial sector deepening Savings- and Credit Co-operative Societies 7 June 2007 Microfinance Client profiles and preferences, useful information for financial sector deepening MicroFinance Institutions 27 June 2007 Research FinScope data and the potential of FinScope market research services Market research service providers 28 June 2007 Mobile telephone industry Usage of mobile telephone services and the potential of mobile payment systems Mobile telephone service providers and regulators

129 from June until the next FinScope survey in 2008 Demand-driven, tailored market research: Market research institutions to offer services to users Feedback from users of information for the next FinScope survey The next FinScope survey may reflect any market innovation implemented in the meantime

130 Register for the workshops with the FSDT Submit questions or issues for mining to: 1. the FSDT dgroup website ( or 2. Juliana, FSDT Office Manager, or

131 Thank you for participating today!

132 This document was created with Win2PDF available at The unregistered version of Win2PDF is for evaluation or non-commercial use only.