What is financial inclusion?

The term 'Financial inclusion' is a process by which both individuals and business establishments have easy access to various financial products as well as financial services. It caters to the needs and requirements of an individual such as payment transactions transfer of assets and credits along with insurance.

How financial inclusion is measured? Financial inclusion is usually measured by calculating number of people who have crossed the age of fifteen hold at least single account within an institution.

How they are developed? Financial inclusions are developed by utilizing individual accounts that provide a range of financial services such as credit, savings, insurance and transfer of payments.

Which group of people is excluded from financial inclusion? Those individuals who do not hold an account with institutions and does not provide financial services such as Micro Finance Institutions are excluded from financial inclusion. A person who does not own a personal account or those who access other people's account are not considered to be financially included. Members who make use of financial services like money guards, deposit collectors and digital recharge cards are regarded as financially included. They also need to make sure that it is not linked to either the bank account or a Micro Finance Account.

Financial inclusion in Tanzania At the time that this article was written, it was estimated that only 24% of population in Sub-Saharan Africa have access to bank account or in other words financially included. Most of the transactions are executed via mobile money accounts. Since the density of population in Tanzania is extremely high, it will be a bit challenging for the financial services to gains access to this country.

According to a report submitted by the World Bank, out of 70% of total rural population, only 29% of the people residing in Tanzania have active bank accounts. On the other, about 61% of urban citizens have active bank accounts which are comparatively higher than the rural households. The report suggests that about 76% of people residing in Tanzania earn an average of about two dollars per day. Out of which half of them are actively engaged in the field of agriculture industry, the World bank added. The Financial inclusion is very essential to stimulate the growth of the economy. During the year 1990, the restrictions imposed on financial markets and the financial institution across the country was eliminated thereby increasing the growth of financial sector with a large number of investment banks and financial services.

A survey conducted by Fin Scope Tanzania in the year 2013 suggested that there was a steady growth in number of people who had access to bank accounts. The survey also revealed that increase in cost, poor technology and lack of awareness was some of the major factors which contributed towards the slow growth of financial inclusion for many years.

A recent study shows that the financial inclusion in Tanzania has jumped from 16% to 86% in the year 2016. It also indicated that there is a steady growth in mobile money.