Financial inclusion in Tanzania: A justification for the shrinking of the gap among the rural dwellers

Financial inclusion in Tanzania: A justification for the shrinking of the gap among the rural dwellers | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Financial inclusion in Tanzania: A justification for the shrinking of the gap among the rural dwellers Kiula Peter Kiula, Walter T. de Vries This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8874479/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 14 You are reading this latest preprint version Abstract In 2023, the FSDT released the key findings of the FinScope Tanzania 2023 Survey. The report compares changes in financial inclusion between 2017 and 2023, and concludes that, overall, the rural–urban financial divide has decreased. However, it remains unclear why and how financial inclusion of rural dwellers would have improved, and why the environment within the country has become more favorable for financial inclusion. Therefore, this study analyses whether and how affirmative actions in Tanzania between 2017 and 2023 contributed to any type of financial inclusion improvement. The study takes changes in financial systems, financial agents, and financial literacy as its theoretical and analytical starting point. These three areas of change are then used as prompts to review government policy documents and associated development literature covering the period from 2017 to 2023, and to address aspects of financial inclusion in Tanzania. The review yielded that Tanzania developed new financial policies, Acts and regulations which has generated novel financial products and services. From these findings, we conclude that changes in financial systems, changes in financial agents, and changes in financial literacy have given Tanzania increased levels of financial inclusion, both in urban and rural areas. Further studies should thus focus on tapping the potential of the banking sector in Tanzania. The study recommends conducting additional research on how policies can influence rural dwellers into financial inclusion through banking. This could accelerate the pace of financial inclusion in rural Tanzania. Financial inclusion Institutional theory Rural development Rural inclusion Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 1. Introduction In its annual report 2008, titled “Finance for All”, the World Bank recommended the adoption of financial inclusion by all nations (World Bank, 2008). The goal of this report was to provide a more equal access to financial assets and services for financially disadvantaged people in society. Almost 20 years later, the World Bank (2025) reiterated that when individuals and people in the business spheres can access and utilize various financial services and products delivered responsibly and sustainably, they are better able to meet their needs. More specifically, seven out of the current 17 Sustainable Development Goals depend on financial inclusion as a catalyst for their achievement. Through financial inclusion, economic growth and employment are fostered, economic activities are strengthened, barriers to economic participation are reduced, productivity is boosted, economic empowerment and social (and economic) equality are promoted, poverty is eliminated, resilience to climate change and natural disasters for individuals and entrepreneurs is built, people are brought into the formal economy, the inclusive and sustainable economic growth is created. Financial inclusion is as the appropriate medium towards economic growth, which absorbs into the formal financial sector the marginalized unbanked segment of society (Boachie et al., 2023). The World Bank (2025) report remarks that there are 1.4 billion adults without financial accounts globally, of which more than 80% live in areas with high risk of climate change, thus becoming vulnerable to economic and environmental shocks. The recommendation is therefore to foster financial inclusion, so that these societies can better invest in infrastructures which are climate–resilient, and adopt sustainable agricultural practices. Also, through access to and use of insurance and savings, individuals would be better able to recover quickly from environmental shocks. Despite these consistent warnings, there are also positive results in the past 20 years. The digitization of financial services has supported the decrease of financial exclusion from 2.5 billion to 1.4 billion between 2011 and 2021 respectively. This means that currently there are 76% of the global adults are in possession of financial accounts. Still, the challenges of financial inclusion persist, especially in low-income countries. Therefore, the calls for more actions to strengthen financial inclusion activities in the low-income countries is stronger than ever (World Bank 2025). Effectively enhancing financial inclusion is not only a matter of creating opportunities to obtain microcredit and microfinance services, but also widening the scope of obtaining digital finance services (Soederberg, 2013; Gabor and Brooks, 2017). The World Bank, therefore, also presented how to improve this access and how to foster financial inclusion. For a vibrant financial inclusion to germinate and blossom in a country, there are eight approaches: (1) fostering a diversity of financial institutions; (2) facilitating the use of innovative technologies and entry of technology–driven, non – traditional institutions; (3) expanding the agent-based banking and other cost-effective delivery channels; (4) investing in supervision and leverage technology to optimize limited resources; (5) implementing the risk-based, tiered AML/CFT requirements; (6) encouraging the development of low–cost, innovative financial products; (7) strengthening financial infrastructure; and, (8) protecting consumers by establishing rules for disclosure, fair treatment, and recourse (World Bank 2017. These older recommendations are still crucial for rural Tanzania. The FSDT’s FinScope Tanzania 2023 survey demonstrates that closing the financial gap between urban and rural dwellers remains difficult (FSDT 2023). Despite this, there has been a significant improvement in financial access. Nevertheless, the big picture of why there is a reduction in the number of previously financially excluded rural dwellers in Tanzania between 2017 and 2023. This has apparently occurred under the radar and why and how this has happened is unknown. One possible explanation is that financial inclusion is not the task of a single entity but a result of various initiatives undertaken by multiple stakeholders (Odugbesan et al., 2022). Who these stakeholders have been and how they operated is not yet well documented. Or in other words, how were the recommendations of the World Bank concretely converted into actions by whom in Tanzania? Hence, the research objective of this study is to disclose which factors/agents contributed to the change in financial inclusion. The article begins by reviewing the state of the art in understanding the concept of financial inclusion. Section 3 presents the research design and data collection and analysis strategies to investigate the gap between theory (the potential reduction in financial exclusion) and reality (the persistent gap in financial exclusion), focusing on three key variables: financial systems, financial agents, and financial literacy. Section 4 discloses the (empirical) findings of the data collection on the changes in financial systems, financial agents, and financial literacy in reducing financial inclusion in rural Tanzania. The succeeding Section 5 discusses the findings in view of how changes in financial systems, changes in financial agents, and changes in financial literacy has led to the improvement of financial inclusion in Tanzania. Section 6 concludes the article by explaining the key changes that top other changes in improving inclusion in Tanzania and on the still existing financial exclusion gap, the section provides recommendations for further research. 2. Theoretical Literature Review There are variations of the meaning of financial inclusion as a concept across countries, based on different perspectives such as policymakers, regulators, suppliers and users (Damane & Ho, 2024). 2.1 Financial inclusion in the eyes of international financial institutions IMF defines financial inclusion as access to formal financial services, such as income, safe money storage, borrowing, and insurance, that are widespread and financially beneficial to integrated economic agents who can access fundamental financial services and products. On the other hand, the Bank for International Settlements defines financial inclusion as the process of providing, through a sound financial infrastructure that meets customer needs, businesses and households with transparent, affordable, effective, accessible, secure, and high-quality financial products and services to ensure efficient financial system operation. Also, the Organization for Economic Co-operation and Development (OECD) defines financial inclusion as the process which through tailored approaches, financial awareness, and education sessions aims at promoting financial wellbeing ensuring all societal segments access to financial products and services which are timely, affordable, and adequate. Lastly, Alliance for Financial Inclusion (AFI) define financial inclusion as the consistent use by households and businesses of authorized providers’ high-quality financial products and services to manage cashflows and mitigate shocks (Damane & Ho, 2024). However, the definition given by Ediagbonya & Tioluwani (2023) summarizes all the mentioned definitions above. According to Ediagbonya & Tioluwani (2023), financial inclusion means that all members of society can access, use, and disseminate affordable financial products and services. Financial inclusion aims at stimulating the accessibility of formal financial services such as credit, insurance, and other forms of equity and their utilization among members of the community and companies. Financial inclusion is one of the components of economic growth and at the same time it helps improve income and employment opportunities of the marginalized groups in the society (Lee Ying et al., 2022). 2.2 Institutional theory as a guide to evaluate financial inclusion in Tanzania North (1990) defines it as a logic which guides processes and instruments by rules, structures, routines, and schemas, and shapes the commanding pillars influencing social behavior. Scholars such as DiMaggio and Powell (1983) define institutional theory as a framework that describe how environmental attributes such as cultural frameworks, norms as well as formal and informal rules are shaping individuals and organizations. Institutional theory reiterates on how organizational behavior and structure are shaped by institutions, key attributes being the institutional environment, isomorphism, and legitimacy (DiMaggio and Powell, 1983), According to Meyer & Rowan (1977), DiMaggio and Powell ((1983) and Scott (2014), institutional theory has several tenets which include the fact that institutions are accepted social structures that have legitimacy and thus, are able to influence organizational behavior and decision-making; institutions have three pillars which are regulative pillar which shapes organizational behavior (through sanctions, laws and rules), normative pillar which guide organizational behavior (through standards, norms and values), and cultural-cognitive pillar which also shapes organizational behavior (through cultural guidelines, meanings and accepted beliefs; isomorphism, the fact that institutional pressures make organization to be always looking for legitimacy and acceptance, thus, they eventually become similar in practice and structure; legitimacy from the fact that organizations are compelled to abide by the cultural guidelines, rules, and norms so as to gain and keep their legitimacy; attributes forming up institutional environment such as cultural guidelines, professions, and state have influence on organizational structure and behavior; to keep their legitimacy, sometimes, organizations adopt structures and practices figuratively but not practically i.e decoupling; and the last tenet dwells on institutional change in which through deinstitutionalization and other process like institutional work, and institutional entrepreneurship institutions change from time to time. Kabigi et al. (2021) use the theory to explain the behavior of land registration agencies in Tanzania. Achmani et al. (2021) apply the theory to evaluate the degree of spatial inclusion. More specifically for financial aspects, Ediagbonya & Tioluwani (2023) use this theory in the context of financial inclusion. Our study considers the World Bank’s 2008 “Finance for All” report and the World Bank’s 2017 eight approaches of fostering financial inclusion as institutional pressures towards global states and private financial institutions including those operating in Tanzania. For our study, we assume that financial inclusion is the result of institutional behavior and typers of interactions between all involved or being dependent on financial transactions. Understanding the degree of financial inclusion thus requires not only looking at behavioral artefacts and inter-agency structures (emerging out of regular, standardized or mutually accepted behavior which cause unwritten rules of inter-agency behavior), but also decoding the norms which actors use to include or exclude each other in certain transactions. Therefore, we decided to employ institutional theory as the guiding theory of our study. Though the institutional theory, we were able to understand why and how the selected Tanzanian financial organizations were able to change their practices and structures between 2017 to 2023 to win and maintain legitimacy before the eyes of the international financial organizations. Institutional theory is utilized in explaining when and why financial inclusion occurs, by showing and explaining how markets, governments, societies, and communities behave and follow particular unwritten rules in their initiatives of accessing and excluding finances. The theory helps to unveil whether financial agencies follow deliberate strategies in inclusion or exclusion and whether government organizations actively or passively stimulate financial inclusion through social structures like rules, routines, and norms which regulate social behaviors (Saifurrahman & Kassim, 2023). Zooming in to behavior and guiding rules of financial agencies, it is possible to unveil the influence of the eight (8) World Bank’s approaches on financial inclusion, which are followed by Tanzania. Tanzania is gradually but steadily improving the rules, structures, routines, and schemas within its financial systems to influence behavior of Tanzanians towards embracing formal financial services and products, thus, paving the way for financial inclusion in urban and rural Tanzania. This is evidenced by the role of financial systems, the behavior of financial agents, and the degree of financial literacy in creating financially inclusive society in Tanzania. 2.3 Evaluation of financial inclusion in Tanzania based on Institution theory To understand financial inclusion in Tanzania between 2017 and 2023, we opted to use institutional theory, considering our created three-dimensional model of financial inclusion, our evaluative criteria is affordability in our IAD framework, thus basing on it, we define the rule, process and outcomes as per Table 1. Table 1. Defining the three dimensions of financial inclusion in Tanzania 2017 - 2023 Definition Bibliographic References Rule (Financial systems) Rules derive processes through creating conducive environment for all segments of the society to access formal financial services easily (Zhang, 2018, Agaban & Mpirirwe, 2023; Zhao & Zhu 2017; Morgan, 2022; Soetan et al, 2021; Malik & Sikarwar, 2024; Malala, 2017; Ezzahid & Elouaourti, 2021; Kangwa et al., 2021; Ediagbonya & Tioluwani, 2023; Ezzahid & Elouaourti, 2021; Saifurrahman & Kassim, 2023) Process (Financial agents) Bridge the gap between the rules (financial systems) and the outcomes (financial literacy) by translating the rules into actions through their daily activities (Senyo et al., 2021; Agelyne & Musau, 2021; Lee Ying et al., 2022; Morgan, 2022; Kangwa et al., 2021; Ediagbonya & Tioluwani, 2023) Outcomes (Financial literacy) The evaluative criteria of outcomes through which one can measure how well the process was able to translate and transform the rules (Jain, 2023; Liebowitz, 2016; Nicolini & Cude, 2022; Malik & Sikarwar, 2024) Prosperity of financial inclusion is enabled by the institutionalization of rules which create conducive environment for people from all segments of the population to access and use formal financial services. The financial system is anchored by financial institutions. A financial system is crafted and controlled by the state (Zhang, 2018). The rules are controlled by the state through financial policies. Policies, including Acts approved by parliament, create a conducive environment for financial institutions such as banks and cellular phone companies providing mobile financial services to operate efficiently towards creating a financially inclusive society. The process simplifies the rules so as to pave the way for the outcomes. In developing economies, daily financial services to the members of the public are provided by the agent thus, improving financial inclusion in the society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time and they are located near trading centers thus, accelerating financial inclusion (Agelyne & Musau, 2021). The established, availability and usage of bank agents has increased financial inclusion to the SMEs (Agelyne & Musau, 2021). For the process to act effectively, it calls for an existence of the ecosystem with several players such as; the FinTech companies - responsible with technology provision to facilitate transactions, technology developing companies - responsible with digital solutions needed by FinTech companies, governments - create and control regulatory frameworks, financial institutions such as banks - the custodians of money, and members of the public - the consumers, users and beneficiaries of the innovated services. The goals of affordability and clarity are fulfilled through the interplay of actors in this ecosystem. The evaluation of the outcomes is done by analyzing two aspects; the first is how effective the formulated policies, acts, and regulations are and the dissemination of their contents to society; and the second is how user friendly the innovations brought by the technology are. The outcome includes the knowledge possessed by people on the existing financial services and their ability to interact with the appropriate technology to access the stipulated financial services. The outcome is defined by people’s ability to access and use the available financial services. 3. Methodology Based on the definitions described in Table 1, we developed indicators on financial inclusion among rural dwellers in Tanzania for each level (rule, process and outcomes). Indicators we developed help in understanding how to detect changes in each level. Changes in the financial system (rules) can be detected through presence of policies supporting innovation, presence of policies supporting access of finance, presence of policies supporting resilient financial system, presence of policies protecting consumer’s safety, presence of innovations in the financial systems, number of financial agents, rate of market expansion for financial services, rate of affordability of formal financial services, rate of affordability and convenience of digital financial services, presence of policies supporting financial agency services, and rate of change in the number of savings accounts. Changes in the financial agents (process) are detected through the business working hours of financial agents and the locations of financial agents. Changes in financial literacy (outcomes) are detected through the presence of policies supporting financial education, the presence of bank programs on financial education, and the presence of policies supporting partnership and sharing in the financial sector. In this study we opted the Institutional Analysis and Development framework to define institutional framework to assess financial inclusion in rural Tanzania. According to Achmani et al., (2021), IAD is a framework that captures a series of scholars’ efforts to recognize traditions through which institutions conduct their affairs and update themselves from time to time. In the IAD framework, key factors and variables are organized by their relevant categories in a basic structure that depicts logical relationships. The demarcated components of the IAD framework are presented in Figure 1. The framework is worthy to be used to describe financial inclusion in the Tanzanian society between 2017 and 2023. In our framework, the evaluative criteria consider inclusion through criteria of affordability and simplicity. Our model of financial inclusion is made up by three levels which are; rule, process and outcomes. Eventually, through implementing the evaluative criteria, financial inclusion with its indicators will be defined. 3.1 Contextualizing the IAD Framework by Three Dimensions: Rule, Process and Outcomes Our three levels in the framework consist of; the input, action arena and outcomes. Financials services providers and the rules created form our input. Our rule level is made up by several attributes manipulating the action area. The concentration of our action arena is on how society members belonging to various population segments are able to access and use the available financials services through simple and secured approaches. Deep examination must show institutions and their actions in simplifying access and usage of financial services and how this is reflected in the outcome. This is a process in which institutions are influencing outcomes. The three-dimensional model and the IAD framework’s interaction are presented in Figure 2. Figure 2. Approaching the IAD framework by three-dimensional model rule – process – outcomes. 3.2 Describing an Institutional Framework for Financial Inclusion “Evaluative criteria” is also applicable as an ingredient of outcomes. Among the key criteria include: (1) diversity of financial institutions; (2) presence of innovative technologies and presence of non – traditional institutions; (3) expanded agent-based banking; (4) supervised and leveraged technology; (5) implemented risk-based requirements; (6) presence of low–cost, innovative financial products; (7) strong financial infrastructure; and, (8) protection of consumers by rules for disclosure, fair treatment, and recourse. All 8 of these are relevant and worthy of use to assess the level of outcomes. All 8 are capable of evaluating both the process and the rules. The goals of diversity of financial institutions are to provide society with a variety of alternatives related to formal financial services for them to choose what they like. The goals of innovative technologies and non-traditional institutions widen the scope of suppliers of financial services thus, adding to more alternatives as it is the case with the goals of the previous criteria. The innovative technologies as well as the supervised and leveraged technologies are customized as per the needs of various population segments in the society. The goals of expanded agent-based banking bring financial services close to the people, thus, cut away a number of inconveniences. The goals of the implemented risk-based requirements and protection of consumers by rules for disclosure, fair treatment, and recourse assure members of the society that it is safe to engage themselves in the formal financial sector. The goals of low -cost innovative financial products are to assure even the low-income earners that their needs are also taken care of, thus, luring them into using formal financial services. Finally, the goals of strong financial infrastructure cement sustainability of all the other goals states earlier. Hence, we reach to our three-dimensional model of financial inclusion showing its relevant indicators as per the rule, process and outcomes. Therefore, our framework is presented in Figure 3. The arrows in the diagram above denote the existing relationship. As indicated by the arrows, the rules provide guidance for processes to achieve the expected outcomes. Our theoretical framework of financial inclusion has arrows connecting rules to outcomes, and process to outcomes. This simply indicates that we can, from time to time, work on process or rules to verify financial inclusion. 3.3 Operationalization of data collection and analysis This study focuses on three major factors which result in changes in financial inclusion: financial systems, financial agents, and financial literacy. Figure 4. presents these factors. The study employed qualitative data collection methods and a case study design, focusing on selected banks and cellular phone companies in Tanzania. We collected data from the annual performance reports of the National Microfinance Bank (NMB), CRDB Bank and Vodacom Company Limited (VTL). CRDB and NMB are the leading banks in Tanzania in terms of performance and customer base. Vodacom is the leading cellular phone company in Tanzania in terms of the number of customers, products and services. We opted for a purposive convenience sampling to select only these two banks and one cellular phone company. From these two banks and one cellular phone company, annual performance reports of 2017 to 2023 were accessed. The size of these reports varies from 120 pages to 388 pages. The reports portray various contents such as the number of customers, the number of agents and the products and services developed between 2017 and 2023 in CRDB, NMB, and Vodacom. In measuring financial inclusion, we were guided by indicators such as presence of appropriate policies, innovations in the financial systems, number of financial agents, rate of market expansion, rate of affordability of financial services, rate of affordability and convenience of digital financial services, number of saving accounts, working hours of financial agents, locations of financial agents, and presence of bank programs on financial education. The study utilized a documentary analysis method. This qualitative research method focuses on understanding documents and interpreting social practices, information, and cultural norms. The method focuses on the form of documents, their context, and their content. This study used written documents, which are the annual reports. Seven (7) Policies and Acts such as; Tanzania’s first National Financial Inclusion Strategy (NFIS – 1 2014 – 2016), National Payment Systems Act (Act No.4 of 2015), Electronic Money Regulations and Payment Services Providers Licensing Regulations of 2015, Tanzania’s National Microfinance Policy of 2017, Tanzania’s Microfinance Act (Act No.10 of 2018), National Financial Education Program 2021/22 to 2025/26, and National Financial Inclusion Strategy (NFIS – 3 2023 – 2028). Eight (8) Vodacom Reports accessed include; Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2024, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2023, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2022, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2021, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2020 – We connect for a better future, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2019, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2018, and Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2017. Seven (7) NMB reports accessed include; NMB Integrated Annual Report for the year ended 31 December 2023: Touching Lives Empowering Communities, NMB Annual Report 2022: 25 Years The Journey of Prosperity, NMB Annual Report 2021: A Partner for Shared Growth, NMB Annual Report 2020: Reaching New Heights, NMB Annual Report 2019: Agility Diligence – Repeat – The Spirit of Great Banking, NMB Annual Report 2018: Getting Ahead – Simplifying Banking, Simplifying Life, and NMB Annual Report 2017: The Transformational Journey of NMB - Our Roots, Journey, Destination. Seven (7) CRDB’s Annual Reports accessed include; 2023 Integrated Annual Report: Broadening our Horizons, Group and Bank Annual Report 2022: Sustaining Value Creation, CRDB Group and Bank Annual Report 2021: Sustainable Value for Growth, 2020 CRDB Group and Bank Annual Report: Shared Value Through the Times, CRDB Group and Bank Annual Report 2019: Value Beyond Numbers, CRDB Bank PLC Annual Report 2018, and CRDB Bank Annual Report 2017. Annex. explains more on the data collection process. 4. Results and Discussion The results and discussion are presented as per the order of the data collection – analysis – inference matrix presented (See the Annex). 4.1 Changes in Financial systems The financial system is an arrangement that is institutionally, aiming at protecting costs and enhancing the manner of allocating resources (Zhang, 2018). The standard of living among community members is raised through their ability to invest, save, and accumulate capital promoted by an inclusive financial system. An inclusive financial system ensures efficient financial services, such as safe savings, effective institutions, and sustainable investment (Agaban & Mpirirwe, 2023). The financial system is made up of both financial intermediaries and specialized financial markets. These two are always related to each other (Zhao & Zhu, 2017). The financial services systems bring together regulators, clients and suppliers of services for mechanisms of value storing and systems of payments for transactions to happen (Soetan et al, 2021). Central banks have the mandate as sole regulatory authorities for financial systems (Malala, 2017). Through financial inclusion, the regulated financial system is made accessible, readily available, and used by all members of the community (Malik & Sikarwar, 2024). Emergence of unregulated sources of credits is highly minimized by an inclusive financial system in the economy (Agaban & Mpirirwe, 2023). Our findings on this variable are presented hereunder. Presence of policies supporting innovations This study found out that between 2017 and 2023, Tanzania developed a number of policies which are supporting innovations in the financial sector. In 2017 for example, Tanzania introduced the Tanzania’s National Microfinance Policy of 2017 (NMP 2017). This policy replaced the National Microfinance Policy of 2000. The National Microfinance Policy of 2017 was introduced to create favorable conditions for the promotion of financial inclusion through the appropriate and innovative microfinance products and services capable of meeting the demands of the low - income earners, thus reducing poverty to enhance economic growth. The first policy objective of Tanzania’s National Microfinance Policy of 2017 is to promote the development of a robust, inclusive financial sector. Tanzania is doing this through encouraging the use of technology and availability of innovative financial products and services to meet the needs a low - income populations; enhancement of financial education and public awareness on microfinance products and services in Tanzania; and ensuring access to appropriate microfinance products and services at an affordable cost in a fair and transparent manner (MoFP 2017). Through the presence of polices supporting innovations in the financial sector in Tanzania, Tanzania had witnessed innovation in financial products and services, especially from the Non – Financial Institutions (NFIs) which include mobile network operators (MNOs) like Vodacom, Airtel, Tigo (Now Yas) and Zantel and the ways they are manipulating technology to reach out the low - income earners. Manipulation of technology to facilitate payments allows the utilization of mobile phones to make payments through banks and non – bank institutions. Access to financial services for most of the unbanked and banked Tanzanians is highly facilitated by the mobile network operators in Tanzania (MoFP 2017). Mobile money uptake is facilitated by the mobile network connectivity (Tanzaniainvest 2024). Mobile money uptake in rural areas is also enabled by increasing network connectivity. When rural areas are well connected more rural people are able to access mobile money services. Presence of supportive policies in Tanzania has seen the innovations taking place in the mobile communication sector in Tanzania. The innovation in mobile communication has led to the improvement of the existing products and the introduction of new products. Vodacom financial products include; M-Pesa overdraft “Songesha”, Savings and loans (M-Pawa, M-Godi and Halal Pesa), Group savings (M-Koba and Changisha), Agents Term Loans, and Insurance services (Vodacom, 2024). Airtel Tanzania’s financial products include; Airtel “Vikoba”, “Kamilisha”, “Timiza”, “Timiza Akiba”, and “AFYA Bima” (Airtel Tanzania, 2025). Tigo Tanzania’s financial products include; “Nivushe” Plus (Tigo Pesa overdraft). Particularly, Vodacom Tanzania introduced M – Koba in 2019 to increasing the saving ability among Tanzanians. M – Koba is a digital saving technology and is one of the MPesa products (GSMA 2023). Saving is a key aspect of financial inclusion. In 2023, the number of mobile subscribers in Tanzania jumped to 64.09 million subscribers. This is an addition of 20.67 million subscribers, equivalent to 47.4 per cent. Vodacom Tanzania, in particular, had the number of its subscribers jump to 19.12 million (Statista, 2025). Most of the mobile subscribers are located in rural Tanzania since according to the United Republic of Tanzania (2024), by 2022, rural dwellers in Tanzania accounted for 65 percent of the total population of Tanzania which was 62 million by 2022. This means that by 2022, Tanzania had 40 million rural dwellers. By 2023, mobile money subscribers doubled in Tanzania compared to the past five years. Mobile money subscribers in Tanzania increased from 25.8 million to 55.8 million between 2019 and 2023. This is associated with an increase in transactions from 3 billion to 5.3 billion Tanzanian Shillings (TZS) during the same period, conducted through mobile money services (Developing Telecoms, 2024). The spread of mobile moneys services In Tanzania has pulled more people into formal financial services. Presence of policies supporting access to finance This study found out that in 2018, Tanzania enacted the Tanzania’s Microfinance Act of 2018 in order to stimulate financial inclusion in Tanzania. As per the United Republic of Tanzania (2018), this Act was enacted to provide for the licensing, regulation and supervision of microfinance business; and to make provisions for related matters. Specifically, the Microfinance Act of 2018 administers the following areas; licensing of microfinance service providers under tiers 2 and 3, Registration of microfinance service providers under tier 4, Management and supervision of microfinance service providers and Microfinance consumer protection. We also found out that Tanzania’s National Microfinance Policy of 2017 is also supporting access to finance. The focus of policy objective one of Tanzania’s National Microfinance Policy 2017 is placed on promoting the development of a robust, inclusive financial sector. Through Tanzania’s Microfinance Act of 2018, Village Community Banks (VICOBA) and Savings and Credit Cooperative Societies (SACCOSS) are legally established. VICOBA is a rural development model that helps members to access credit (Ngalemwa 2013). Members of VICOBA enjoy such benefits as loans and opportunities for business training, which, on the other hand, assist members to establish more income-generating activities, thus able to own assets like livestock, land, farms and houses (Jollystar & Lyimo 2023). Tanzania has a total of 1,283 SACCOSS as of 3 rd December 2023, out of which 671 SACCOSS are from five regions, which are Arusha, Dar es Salaam, Kilimanjaro, Mbeya and Tanga. These are the five regions with the highest number of SACCOSS in Tanzania. On the other hand, the five regions with the fewest SACCOSS in Tanzania are Katavi, Lindi, Mtwara, Simiyu, and Songwe. In total, they have only 36 SACCOSS (TCDC 2023). Policy objective one of Tanzania’s National Microfinance Policy of 2017 aims at promoting the development of a robust, inclusive financial sector. The government of Tanzania is doing this by encouraging utilization of technology and promoting the presence of innovative financial products and services which target the low – income segments of the population. In this same policy objective, the government of Tanzania is promoting access to appropriate microfinance products and services at costs affordable to low–income segments of the population in a transparent and fair manner. Between 2017 and 2023, Tanzania has seen appropriate use of technology in the financial sector, which has made it possible for the presence and spread of financial products even to the low–income segments of society. Presence of financial agents vindicate this. Financial products by mobile financial providers in Tanzania is another good example of this. Access to finance in Tanzania is improving financial inclusion to the financially excluded Tanzanians. Presence of policies supporting a resilient financial system One of the policy objectives of Tanzania’s National Microfinance Policy of 2017 is to attain sustainability of microfinance service providers. The government of Tanzania is achieving this financial policy objective by promoting financial market development in the microfinance sub-sector, ensuring sustainable capacity building in the microfinance sub-sector, and encouraging the mainstreaming of community financial groups into the financial system. Furthermore, Tanzania’s Microfinance Act of 2018 is responsible for licensing microfinance businesses and their management (TCDC 2023). This role is played by the central bank of Tanzania, and by so doing, it strengthens Tanzania’s financial policy. The financial system is an arrangement that is institutionally, aiming at protecting costs and enhancing the manner of allocating resources. It is both, tangible frameworks and an outcome of interdependent evolutions. A financial system is crafted and controlled by the state (Zhang, 2018). Resilience of the financial system is seen in its ability to keep the cost affordable while maintaining the allocation of resources. This study found out that, through the use of monetary policy instruments, the central bank of Tanzania is influencing the cost of borrowing and money supply in the economy. The monetary policy of the central bank of Tanzania is built on a framework which manages price stability for the balanced and sustainable growth of Tanzania’s economy (BoT 2025). Tanzania’s National Microfinance Policy of 2017 also plays its part in making Tanzania’s financial systems resilient. The determination of Tanzania’s National Microfinance Policy of 2017 to create a resilient finance system in Tanzania deeply rooted in its vision and mission. Tanzania’s National Microfinance Policy of 2017 envisions a stable, vibrant and inclusive microfinance subsector. This will be achieved though creating legal and regulatory environment that ensures growth of strong microfinance institutions that delivers inclusive financial services to low-income individual, households and enterprise through innovative, diversified, sustainable, affordable and easily accessible financial services. These will be complemented with promotional of the development of a robust, inclusive sector, attaining sustainability of microfinance service providers’, creating legal and regulatory framework for effective and efficient delivering of microfinance, promotion of research, innovation and product development in microfinance sub-sector, strengthening of regional and international cooperation in microfinance sub-sector, and encouraging of adherence to principles of good governance in microfinance sub sector (MoF 2017). An inclusive and strong microfinance subsector plays a great role in making the financial system resilient. Policy objective one of Tanzania’s National Microfinance Policy of 2017 aims at promoting the development of a robust, inclusive financial sector. The government of Tanzania is doing this by encouraging utilization of technology and promoting the presence of innovative financial products and services which are targeting the low – income segments of the population. In this same policy objective, the government of Tanzania is promoting access of appropriate microfinance products and services at costs affordable to low – income segments of the population in a transparent and fair manner. This strengthens Tanzania’s financial system needed for financial inclusion. Similarly, policy objective three of Tanzania’s National Microfinance Policy of 2017 aims at creating a legal and regulatory framework for effective and efficient delivery of microfinance services. The government of Tanzania is fulfilling this by enhancing legal, regulatory and supervisory oversight in the microfinance sub-sector, enforcing consumer protection in the microfinance sub – sector, and enhancing information sharing infrastructure among regulators in the microfinance sub – sector. A strong legal environment creates a strong and resilient financial system which catalyze the blossoming of financial inclusion in Tanzania. Presence of policies protecting consumers’ safety Between 2017 and 2023, Tanzania developed regulations which are meant to protect financial customers. Specifically, to financial service providers, the regulations compel financial service providers to; have in place a structure of governance that will ensure effective implementation of consumer protection in accordance with the provisions of consumer protection in accordance with the provisions of these regulations; put in place internal controls including effective assurance functions for consumer protection such as internal audit and compliance functions, governance policies and structures; have in place appropriate financial consumer protection policies which are consistent with the provisions set forth in these regulations; annually review financial consumer protection policies and submit to the Bank the revised policies indicating all changes made therein not later than thirty days after its Board’s approval; and report financial consumer protection matters to the Bank in the form and at the time prescribed by the Bank (URT 2019). The Bank of Tanzania issued financial consumer protection regulations in 2019. These regulations include laws, institutions, practices, and policies to protect consumer rights, enabling consumers to make informed financial decisions and ensuring fairness in the provision of products and services by financial service providers. The financial consumer protection regulations in Tanzania cover a number of areas, such as; governance by financial service providers, fair and equitable treatment of consumers, financial education and awareness, disclosure and transparency, responsible business conduct, protection of consumers’ assets and information, competitive environment, consumer handling mechanism, and enforcement and sanctions (URT 2019). Assurance of consumer protection attracts more Tanzanians into using formal financial services. Presence of innovations in the financial systems Tanzania has more than 44 registered formal banks (BOT 2024). However, we decided to sample only two banks that have shown strong performance in recent years. These two banks are CRDB Bank and the National Microfinance Bank (NMB). The findings in this section are highly influenced by integrated annual reports released from 2017 to 2023 by CRDB Bank and the National Microfinance Bank (NMB). A series of innovations had been done in the banking industry in Tanzania between 2017 and 2023, where both, CRDB and NMB did their best to pull in the low - income earners into the formal financial services. This has been done through the innovation of affordable financial products such as CRDB’s Hodari program and Tanzania’s National Microfinance Bank (NMB)’s “Chap Chap Account”, and “Fanikiwa Account”. Hodari program is a financial inclusion initiative innovated by CRDB. It is executed through the opening up of the business bank account known as “Hodari Account” which is targeting the Micro – Small Enterprises (MSE) segment including women operating either formal or informal. To make it more effective and efficient, the “Hodari Account” has a zero minimum operating balance, zero maintenance fee and zero withdrawal charges on all CRDB channels of payment. Through this account, the formerly financially excluded individuals are now making deposits, receiving money, making payments, receiving payments, withdrawing and setting up standing orders through formal financial procedures, hence, financially included (CRDBBANK 2024). Rural dwellers are also targeted by this campaign. Tanzania’s National Microfinance Bank (NMB), on the other hand, has done some significant innovative initiatives on attracting financial inclusion to the financially excluded, such as rural dwellers. Among these is the creation of an instant account aiming at helping individuals, including women, to overcome remarkable challenges of financial inclusion. This instant account is known as “Chap Chap Account”. An individual needs to possess only a valid ID card to open this account. Among the unique features of this account is the fact that it does not have a monthly account maintenance fee. In this way, a good number of financially excluded individuals are gradually becoming included (NMBBANK 2024). NMB Fanikiwa Account is another NMB initiative on financial inclusion. This is a customized account aiming at attracting individuals including rural dwellers owning Micro and Small Enterprises (MSE). Owners of this special account are eligible to attend capacity building programs and other networking programs organized through the NMB Business Club. They are also eligible for a free NMB Faraja Insurance policy while enjoying unlimited transactions on their accounts (NMBBANK 2024). These measures are meant to ensure that no member of the Tanzanian society, including rural dwellers, is left behind. The result of these measures is a reduction in the Tanzanian rural dwellers who are financially excluded, as explained hereunder. All these are targeting the low-income earners, mostly rural dwellers, for financial inclusion. By so doing, these two banks are in line with the sixth World Bank’s approach on financial inclusion, which is encouraging the development of low–cost, innovative financial products. Innovation is key in Tanzania’s financial inclusion journey. Number of Financial agents The CRDB and Tanzania’s National Microfinance Bank (NMB) have chains of “WAKALA” (Agents) who operate through Point of Sale (POS) machines to perform the various banking services thus increasing the scope of service outlets to customers. This fits into the third World Bank’s approach on financial inclusion, which is expanding agent–based banking and other cost–effective delivery channels. Between 2017 and 2023, Tanzania’s National Microfinance Bank (NMB) had 3,785 bank agents “Wakala”. During the same period, CRDB Bank had 3,286 bank agents (NMB 2017 and CRDB 2017). However, in 2023, the number of NMB bank agents rose to 28,295 banks agents. On the other hand, CRBD Bank had 34,627 bank agents (NMB 2023 and CRDB 2023). This is summarized in Figure 5. Tanzania has seen an increase in the number of financial agents between 2017 and 2023. In developing economies, daily financial services to the members of the public are provided by the agent, thus improving financial inclusion in the society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time and they are located near trading centers thus, accelerating financial inclusion (Agelyne & Musau, 2021). Mobile money services are so convenient to individuals who are in constant need of financial services like obtaining micro-credits, recharging their airtime, paying bills) such as electricity and water bills) and fees (such as school fees), insurance services, money transfer, recharging their data bundles, and depositing cash (Senyo et al., 2021). Being a developing economy, Tanzania is gradually improving its financial inclusion status through a sharp increase in the number of financial agents. Rate of Market expansion for financial services Financial inclusion in developing economies is currently influenced by the financial transactions performed without the need for a bank account, and they are facilitated by a FinTech innovation, which is mobile money (Senyo et al., 2021). As per the GSM Association, mobile money services are associated by features such as; utilizing mobile phone to do financial transactions, being present to individuals without ownership of bank accounts, and possessing a network made of agents that allows physical transactions beyond ATMs and bank branches still customers can deposit and withdraw cash (Morgan, 2022). Mobile money which is one of the digital finance services is a source of revenue (Kangwa et al., 2021). Mobile banking is impacting positively both; financial inclusion and levels of income (Ezzahid & Elouaourti, 2021). Money benefits firms and individual clients thus, financial services are useful in everyday interactions (Soetan et al., 2021). Internet and mobile phones facilitate acquisition of digital financial services cheaply and conveniently (Ezzahid & Elouaourti, 2021). The heterogenous nature of mobile money operators involve both; cooperation and competition through well-defined boundaries and coordination leading to the realization of a common goal (Senyo et al., 2021). Introduction of mobile payment system in the developing economy can be interpreted as both; political development and economic development as well (Malala, 2017). The rural challenges such as remittance costs and remoteness are resolved through mobile banking services provided by the Fintech to rural dwellers (Ezzahid & Elouaourti, 2021). Mobile payments have increased public engagement in the formal financial system, through the opening of savings accounts in financial intermediaries that are regulated (Malala, 2017). The saving behavior is highly influenced by the provision of financial services via mobile phones (Ezzahid & Elouaourti, 2021). Compared to other modalities, mobile money transactions benefit unbanked and underbanked individuals significantly. The benefits include low costs which is a result of utilizing the already established mobile network thus, it creates profit even out of transactions which are comparatively low in volume. Also, a bank branch network is more costly than an agent network, whereas mobile money transactions are facilitated by an agent network. Lastly, with a proper and minimal documentation, it is able to swallow in a large proportion of the members of community who are not banked (Morgan, 2022). As per the data we collected, the findings in this section are explained based on the trend of the mobile money customers in Tanzania. This section is highly influenced by the Vodacom Tanzania Public Limited Company: Annual Integrated Reports released from 2017 to 2024. However, annual reports of other mobile operators in Tanzania could not be obtained, so we had to access information released by other authorities to fill the information gap left by their absence. Mobile money uptake is facilitated by the mobile network connectivity (Tanzaniainvest 2024). In 2017, Tanzania's six mobile operators had a total of 43.47 million subscribers. Vodacom Tanzania in particular, had 14.14 million subscribers in 2018 (Statista, 2025). As per the Vodacom Tanzania’s Annual Integrated Report of 2018, 63 per cent of all Vodacom Customers uses Vodacom financial services (Vodacom, 2024). Trend of Vodacom customers and Vodacom M-Pesa customers between 2017 and 2023 is summarized in Figure 6. By 2023, mobile money subscribers doubled in Tanzania as compared to the past five years. Mobile money subscribers in Tanzania escalated from 25.8 million to 55.8 million between 2019 and 2023 respectively. This is associated with escalated number of transactions from 3 billion to 5.3 billion Tanzanian Shillings (TZS) during the same period, done through mobile money services. Nonetheless, the number of mobile phone subscribers escalated to 76.6 million from 43.7 million between 2019 and 2023 (Developing Telecoms, 2024). By 2023, the number of mobile subscribers in Tanzania jumped to 64.09 million subscribers. This is an addition of 20.67 million subscribers, equivalent to 47.4 per cent. Vodacom Tanzania in particular, had the number of its subscribers jumped to 19.12 million (Statista, 2025). Most of the mobile subscribers are located in rural Tanzania since according to the United Republic of Tanzania (2024), by 2022, rural dwellers in Tanzania accounted for 65 percent of the total population of Tanzania which was 62 million by 2022. This means that by 2022, Tanzania had 40 million rural dwellers. Trend of mobile subscribers among mobile phone operators between 2018 and 2023 is summarized in Figure 7. Presence of supportive policies in Tanzania has seen innovations taking place in the mobile money sector in Tanzania. The innovation in mobile communication has led to the improvement of the existing products and the introduction of new products. Vodacom financial products include; M-Pesa overdraft “Songesha”, Savings and loans (M-Pawa, M-Godi and Halal Pesa), Group savings (M-Koba and Changisha), Agents Term Loans, and Insurance services (Vodacom, 2024). Airtel Tanzania’s financial products include; Airtel “Vikoba”, “Kamilisha”, “Timiza”, “Timiza Akiba”, and “AFYA Bima” (Airtel Tanzania, 2025). Tigo Tanzania’s financial products include; “Nivushe” Plus (Tigo Pesa overdraft). Particularly, Vodacom Tanzania introduced M – Koba in 2019 to increasing the saving ability among Tanzanians. M – Koba is a digital saving technology and is one of the MPesa products (GSMA 2023). Saving is one of the key aspects of financial inclusion. Mobile money uptake in rural areas is also enabled by increasing network connectivity. When rural areas are well-connected, more rural people are able to access mobile money services and other formal financial services. Rate of affordability of formal financial services Both, CRDB and NMB have been trying their best to pull in the low - income earners into the formal financial services. This has been done through the development and introduction of affordable financial products. Good examples here are; CRDB’s Hodari program and The Tanzania’s National Microfinance Bank (NMB)’s “Chap Chap Account”, and “Fanikiwa Account”. All these three are targeting the low - income earners mostly rural dwellers into the financial inclusion. Financial inclusion is the act of accessing financial assets and formal loans to alleviate income inequality (Kling et al, 2020). According to Ediagbonya & Tioluwani (2023), financial inclusion means making members of the community especially the low-income earners, the poor and marginalized able to be provided with financial services and able to access them (Ediagbonya & Tioluwani, 2023). The presence of such products as the CRDB’s “Hodari” program and the NMB’s “Chap Chap Account” and “Fanikiwa Account”, which are targeting low-income earners, increase financial inclusion in Tanzania. The affordability of financial products and services in Tanzania increases financial inclusion among Tanzanians. Rate of affordability and convenience of digital financial services We describe rate of affordability and convenience of digital financial services by looking at the number of people who were able to afford a specific financial service in 2017 as compared with the number affording the same service in 2023. that, between 2017 and 2023, there have been several changes in the number of recipients of financial services in Tanzania. Some of these changes include: increase in the number of NMB account holders from 2.2 million account holders in 2017 to 7.1 million account holders, also the number of mobile money subscribers in Tanzania increased from 25.8 million in 2019 to 55.8 million in 2023, and the number of CRDB bank agents has increased from 3,286 in 2017 to 34,627 in 2023. According to Sathish & Vidya (2025), change of affordability and convenience of digital financial services is influenced by technological infrastructure, security, regulatory environment, financial literacy, and digital literacy, trust, and skills. Tanzania has seen several improvements in technological infrastructure, security, regulatory environment, financial literacy, digital literacy, trust, and skills. Tanzania’s National Microfinance Policy of 2017 (NMP 2017) supports development and improvement in technological infrastructure, digital literacy, trust, and a friendly financial regulatory environment. On the other hand, the Bank of Tanzania financial (consumer protection) regulations of 2019 support financial security, a friendly financial regulatory environment, and financial literacy. In addition to that, Tanzania’s Microfinance Act of 2018 also supports a friendly financial regulatory environment. Based on these friendly financial policies, digital financial services become more affordable and convenient in Tanzania, leading to more financial inclusion. Presence of policies supporting financial agency services The presence of financial agents is supported by Tanzania’s National Microfinance Policy 2017. The first policy objective of Tanzania’s National Microfinance Policy of 2017 is to promote the development of a robust, inclusive financial sector. Tanzania is doing this through encouraging the use of technology and availability of innovative financial products and services to meet the needs a low - income populations; enhancement of financial education and public awareness on microfinance products and services in Tanzania; and ensuring access to appropriate microfinance products and services at an affordable cost in a fair and transparent manner (MoFP 2017). In developing economies, daily financial services to the members of the public are provided by the agent, thus improving financial inclusion in the society (Senyo et al., 2021). Financial agents are more common in developing economies where as a single person or small firms, they provide digital financial services including cash deposits and withdrawals similar to bank branches. Unlike bank branches, financial agents offer services such as airtime sales, mobile money transfers, and mobile money registrations (Senyo et al., 2021). Provisions of Tanzania’s National Microfinance Policy 2017 first objective open doors to financial institutions such as banks to innovate suitable products which are compatible with the needs of the financial consumers at affordable prices. One of such products is agency banking. Financial agents have proved to be effective in Tanzania’s financial inclusion journey. Rate of change in the number of savings accounts There have been positive changes in the number of saving accounts within NMB and CRDB. The collected data from these two banks show that between 2017 and 2023, Tanzania’s National Microfinance Bank (NMB) had 2.2 million customers. During the same period, The CRDB Bank had less than 1.5 million customers (NMB 2017 and CRDB 2017). However, in 2023, the number of NMB customers rose to 7.1 million. On the other hand, the CRBD Bank had more than 4 million customers (NMB 2023 and CRDB 2023). This is summarized in Figure 8. Variables for measuring the rate of financial inclusion in the society include; Number of commercial bank branches (per 100,000 adults), Number of ATMs (per 100,000 adults), Domestic credit provided by the financial sector (% of GDP), and Net national savings (% of GNI) (Nasution et al.,2022; Damane & Ho, 2024; Malik & Sikarwar, 2024). Both NMB and CRDB banks have seen an increase in the number of their customers, specifically, account holders from 2.2 million to 7.1 million and from less than 1.5 million to more than 4 million customers, respectively. The changes in the number of saving accounts within NMB and CRDB are attributed to several factors, improving financial inclusion in Tanzania. 4.2 Changes in Financial agents In developing economies, daily financial services to the public are provided by agents, thereby improving financial inclusion in society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time, and they are located near trading centers, thus accelerating financial inclusion (Agelyne & Musau, 2021). Agents are more common in developing economies where as a single person or small firms, they provide digital financial services including cash deposits and withdrawals similar to bank branches. However, with agents, the services are extended to airtime sales, transfers of mobile money and registrations of mobile money (Senyo et al., 2021). The established, availability and usage of bank agents has increased financial inclusion to the SMEs (Agelyne & Musau, 2021). Mobile money services are so convenient to individuals who are in a constant need of financial services like obtaining micro-credits, recharging their airtime, paying bills) such as electricity and water bills) and fees (such as school fees), insurance services, money transfer, recharging their data bundles, and depositing cash. In the world of mobile money, the combination of old and new players assigns each its unique role to ensure cooperation and fair competition. There are five players in this ecosystem; the FinTech companies - responsible with technology provision to facilitate transactions, technology developing companies - responsible with digital solutions needed by FinTech companies, governments - create and control regulatory frameworks, financial institutions such as banks - the custodians of money, and members of the public - the consumers, users and beneficiaries of the innovated services (Senyo et al., 2021). Our findings on financial agents are presented hereunder. Business working hours of financial agents Based on the collected data from NMB and CRDB, the segment of bank agents saw a dramatic positive increase between 2017 and 2023. The collected data show that among the good things related to bank agents is the fact that bank agents are located close to communities as compared to the formal bank branches. Nonetheless, observation shows that some bank agents offer financial services up to midnight and a few of them remain open 24 hours, 7 days a week. Unlike bank branches, many financial agents operate from morning hours to midnight. Nonetheless, some financial agents operate 24 hours. This fact makes financial agents favorites among customers who need financial services at any time of day. Being open till night means that people can make a deposit of their cash at any time, including late-night hours, thus keeping their cash safe and out of any danger, which can happen if they keep their cash at home. The most popular dangers associated with keeping cash at home include theft, fire, or being destroyed by rabbits, or rainfall in substandard houses of rural areas. Rural people like farmers who conduct their daily post-harvest businesses till late at night are among the major beneficiaries of financial agents. The presence of financial agents attracts rural dwellers to formal financial services. Locations of financial agents Tanzania has a total of 206 local administration councils. Of them, 141 are rural local administration councils, and 139 are located in rural areas of Tanzania Mainland (URT 2024). According to the CRDB Integrated Annual Report, CRDB bank services are available in all 195 local administration councils of Tanzania Mainland, including the 139 councils located in rural Tanzania (CRDB 2020). CRDB banking agents are also found all over Tanzania, including rural Tanzania. CRDB Bank and NMB Bank are the two banks with the widest networks of services in Tanzania. With the aid of fintech innovations, CRDB Bank and NMB Bank have been able to extend agent banking all over Tanzania, even in rural areas. Financial agents are located in people’s vicinity thus, bringing formal financial services close to excluded segments of the community. Bank agents recruited by CRDB assisted 284,056 customers in opening bank accounts with CRDB in 2017 (CRDB 2018). The widespread presence of financial agents even in rural areas of Tanzania, has increased the portion of population which is using formal financial services. 4.3 Changes in Financial Literacy Financial literacy is the capability to; craft and implement sound decisions on the utilization and control of money; apply facts and skills to control resources related to financial matters for everlasting financial wellbeing; perceive finance, planning, implement saving and craft wealth accumulation strategy; and to utilize understanding of financial facts and risks, motivation in making sound decisions in various financial situations so as to enhance financial well – being of the members and the whole society, thus facilitating their participation in building their economy (Jain, 2023; Liebowitz, 2016; Nicolini & Cude, 2022)). Financial literacy aims at achieving four goals, which are: raising awareness and accessibility to financial education, fixing and mixing fundamental financial competencies, expanding financial education set–up, and recognizing, strengthening, and communicating best practices (Liebowitz, 2016). Financial education is a set of interventions designed to change components of financial literacy (Nicolini & Cude, 2022). Our findings on financial literacy are presented in the following details. Presence of policies supporting financial education The Bank of Tanzania (Financial Consumer Protection) Regulations (2019) issued by the Government Notice number 884 of 2019, among other things, is supporting financial education. Part IV of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019 is dedicated to financial education and awareness. In Tanzania, this is done by compelling financial service providers to develop a consumer strategy, defining and segmenting the market with needs and communication preferences. The Bank of Tanzania demands that the developed strategies should clearly define market segments, key financial needs and messages, appropriate channels for reaching the market segments, and mapping of stakeholders for effective financial education delivery. In Tanzania, financial service providers are required by the Bank of Tanzania (Financial Consumer Protection) Regulations (2019) to develop financial education programs that consider consumers' location, gender, education levels, abilities, and occupation (BoT 2019). The developed financial programs are supposed to be cost-effective, capable of influencing financial behavior, easily understood, aiming at providing advice and not acting as a marketing program, and materials should be in English and Kiswahili so as to be understood by all members of the community. To ensure all these are done, financial service providers are required to develop communication strategies, and also to establish mechanisms for monitoring and evaluation to track and assess their financial education campaigns and programs. Well-crafted financial education programs in Tanzania are proving effective in attracting more Tanzanians into formal financial services. Presence of bank programs on financial education CRDB, as a member of the banking sector, has been implementing financial education programs by conducting a number of campaigns aiming at attracting financially excluded segments of the community, such as rural dwellers, to subscribe to their products and services. The most popular CRDB’s financial education program is “Zogo Mchongo” initiative. “Zogo Mchongo” is part and parcel of the CRDB’s Financial Education Plan (2021/22 – 2025/26) aiming at creating financial awareness to a wider segment of the Tanzania population for prosperous financial inclusion. The CRDB’s financial education program is operated as an information and entertainment TV program broadcast by Clouds TV. Its main focus is to raise the community’s awareness of the formal financial services, hence increasing their usage among the members of the community. Thus, tapping the financially excluded individuals into the formal financial sector (CRDBBANK 2024). Rural dwellers are also targeted by this campaign. The impact of the CRDB’s financial education programs is reflected in the increase in the number of customers who are opening bank accounts with CRDB and other banks such as NMB in Tanzania. The more people with saving accounts in the population the more financially inclusive is the society. Presence of policies supporting partnership and sharing in the financial sector Tanzania’s National Microfinance Policy of 2017 supports partnership and sharing in the financial sector. One of the policy objectives of the NMP 2017 is to strengthen regional and international cooperation in the microfinance sub-sector. In this objective, the government of Tanzania is collaborating with stakeholders in the financial industry in Tanzania to domesticate regional and international treaties, protocols, and Memoranda of Understanding on microfinance matters, and to deepen cross-border coordination and cooperation among regulators to promote the orderly provision of financial services in the region (MoFP 2017). Policy objective five of Tanzania’s National Microfinance Policy of 2017 is to strengthen regional and international cooperation in the microfinance sub-sector. This objective is the response to the number of ratified protocols which Tanzania has signed with international and regional bodies such as the East African Community (EAC), the South African Development Community (SADC), the African Union (AU), and the International Microfinance Network. All these bodies call for harmonization in financial policies, laws and systems for financial inclusiveness. The domestication of regional and international Memoranda of Understanding, protocols and treaties, on microfinance and financial matters, strengthen reginal and international interaction among financial regulators to offer best quality financial services in Tanzania and other related countries. As a result, Tanzania is gradually improving its financial inclusion status. 5. Conclusion and Policy Recommendations The findings of this study on financial inclusion in Tanzania: A justification for the shrinking of the gap among the rural dwellers have found that between 2017 and 2023, there have been several changes in financial systems, financial agents, and financial literacy in Tanzania. These changes are evidenced by various indicators such as presence of policies supporting innovations, presence of policies supporting access to finance, presence of policies supporting resilient financial system, presence of policies protecting consumer’s safety, presence of innovations in the financial systems, number of financial agents, rate of market expansion for financial services, rate of affordability of formal financial services, rate of affordability and convenience of digital financial services, presence of policies supporting financial agency services, and rate of change in the number of savings accounts on financial systems; and business working hours of financial agents, and locations of financial agents on financial agents; and presence of policies supporting financial education, presence of bank programs on financial education, and presence of policies supporting partnership and sharing in the financial sector on financial literacy. However, it is the policies, Acts and regulations which have stimulated other changes and made a significant improvement in the financial inclusion in Tanzania between 2017 and 2023. During this period, Tanzania developed a number of policies which are supporting innovations in the financial sector. These include; the National Microfinance Policy of 2017, the Microfinance Act of 2018 and the Bank of Tanzania (Financial Consumer Protection) Regulations (2019). Through policies, Acts and regulations which are supporting formation of resilient financial systems, access to finance, financial agency services, financial education protection of consumer’s safety in financial sector and partnerships and sharing in the financial sector, several changes were possible in financial inclusion in Tanzania between 2017 and 2023 and pulled more people into formal financial services thus, Tanzania is gradually but steadily improving its financial inclusion status. Policymakers should focus on institutional adjustments which will make banking products available, accessible, affordable, and usable to low-income groups and rural dwellers for a vibrant financial inclusion in Tanzania. 5.1 Study Limitations and Future Recommendations On mobile money services, it is only annual reports of Vodacom Tanzania Limited which are available and accessible online. Without this limitation, role of mobile money services would have been presented in a relatively broader picture. The fact that potential of banking is still not much tapped in Tanzania, further studies should investigate how policies can influence rural dwellers into financial inclusion through banking. Declarations Data Availability Statement: The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request. Consent to Publish declaration: Not applicable Ethics Approval Not applicable. Clinical Trial Number Not applicable. Consent to Participate declaration Not applicable. Funding There is no external funding for this research. Competing Interests The authors declare that they have no competing interests. Author Contribution Prof. WV (Walter Timo de Vries) proposed and clarified the research idea, developed the methodology, cross-checking analysis techniques, reviewed the overall manuscript, and guided the entire process of the study. KPK (Kiula Peter Kiula) wrote the main manuscript text, designed the theoretical framework, literature review, collected data, analyzed the collected data, formulated the conclusion of this study. All authors read, agreed and approved the final manuscript. References Achmani, Y., W. T. d. Vries, J. Serrano, and M. Bonnefond. (2020). Determining indicators related to land management interventions to measure spatial inequalities in an urban (re) development process. Land 9 (11):448. Agaba, A. M., & Mpirirwe, C.(2023). 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Introduction","content":"\u003cp\u003eIn its annual report 2008, titled \u0026ldquo;Finance for All\u0026rdquo;, the World Bank recommended the adoption of financial inclusion by all nations (World Bank, 2008). The goal of this report was to provide a more equal access to financial assets and services for financially disadvantaged people in society. Almost 20 years later, the World Bank (2025) reiterated that when individuals and people in the business spheres can access and utilize various financial services and products delivered responsibly and sustainably, they are better able to meet their needs. More specifically, seven out of the current 17 Sustainable Development Goals depend on financial inclusion as a catalyst for their achievement. Through financial inclusion, economic growth and employment are fostered, economic activities are strengthened, barriers to economic participation are reduced, productivity is boosted, economic empowerment and social (and economic) equality are promoted, poverty is eliminated, resilience to climate change and natural disasters for individuals and entrepreneurs is built, people are brought into the formal economy, the inclusive and sustainable economic growth is created. Financial inclusion is as the appropriate medium towards economic growth, which absorbs into the formal financial sector the marginalized unbanked segment of society (Boachie et al., 2023).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe World Bank (2025) report remarks that there are 1.4 billion adults without financial accounts globally, of which more than 80% live in areas with high risk of climate change, thus becoming vulnerable to economic and environmental shocks. The recommendation is therefore to foster financial inclusion, so that these societies can better invest in infrastructures which are climate\u0026ndash;resilient, and adopt sustainable agricultural practices. Also, through access to and use of insurance and savings, individuals would be better able to recover quickly from environmental shocks.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eDespite these consistent warnings, there are also positive results in the past 20 years. The digitization of financial services has supported the decrease of financial exclusion from 2.5 billion to 1.4 billion between 2011 and 2021 respectively. This means that currently there are 76% of the global adults are in possession of financial accounts. Still, the challenges of financial inclusion persist, especially in low-income countries. Therefore, the calls for more actions to strengthen financial inclusion activities in the low-income countries is stronger than ever (World Bank 2025). \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eEffectively enhancing financial inclusion is not only a matter of creating opportunities to obtain microcredit and microfinance services, but also widening the scope of obtaining digital finance services (Soederberg, 2013; Gabor and Brooks, 2017). \u0026nbsp;The World Bank, therefore, also presented how to improve this access and how to foster financial inclusion. For a vibrant financial inclusion to germinate and blossom in a country, there are eight approaches: (1) fostering a diversity of financial institutions; (2) facilitating the use of innovative technologies and entry of technology\u0026ndash;driven, non \u0026ndash; traditional institutions; (3) expanding the agent-based banking and other cost-effective delivery channels; (4) investing in supervision and leverage technology to optimize limited resources; (5) implementing the risk-based, tiered AML/CFT requirements; (6) encouraging the development of low\u0026ndash;cost, innovative financial products; (7) strengthening financial infrastructure; and, (8) protecting consumers by establishing rules for disclosure, fair treatment, and recourse (World Bank 2017.\u003c/p\u003e\n\u003cp\u003eThese older recommendations are still crucial for rural Tanzania. The FSDT\u0026rsquo;s FinScope Tanzania 2023 survey demonstrates that closing the financial gap between urban and rural dwellers remains difficult (FSDT 2023). Despite this, there has been a significant improvement in financial access. Nevertheless, the big picture of why there is a reduction in the number of previously financially excluded rural dwellers in Tanzania between 2017 and 2023. This has apparently occurred under the radar and why and how this has happened is unknown. One possible explanation is that financial inclusion is not the task of a single entity but a result of various initiatives undertaken by multiple stakeholders (Odugbesan et al., 2022). Who these stakeholders have been and how they operated is not yet well documented. Or in other words, how were the recommendations of the World Bank concretely converted into actions by whom in Tanzania? Hence, the research objective of this study is to disclose which factors/agents contributed to the change in financial inclusion.\u003c/p\u003e\n\u003cp\u003eThe article begins by reviewing the state of the art in understanding the concept of financial inclusion. Section 3 presents the research design and data collection and analysis strategies to investigate the gap between theory (the potential reduction in financial exclusion) and reality (the persistent gap in financial exclusion), focusing on three key variables: financial systems, financial agents, and financial literacy. Section 4 discloses the (empirical) findings of the data collection on the changes in financial systems, financial agents, and financial literacy in reducing financial inclusion in rural Tanzania. The succeeding Section 5 discusses the findings in view of how changes in financial systems, changes in financial agents, and changes in financial literacy has led to the improvement of financial inclusion in Tanzania. Section 6 concludes the article by explaining the key changes that top other changes in improving inclusion in Tanzania and on the still existing financial exclusion gap, the section provides recommendations for further research.\u003c/p\u003e"},{"header":"2. Theoretical Literature Review ","content":"\u003cp\u003eThere are variations of the meaning of financial inclusion as a concept across countries, based on different perspectives such as policymakers, regulators, suppliers and users (Damane \u0026amp; Ho, 2024).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e2.1 Financial inclusion in the eyes of international financial institutions\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eIMF defines financial inclusion as access to formal financial services, such as income, safe money storage, borrowing, and insurance, that are widespread and financially beneficial to integrated economic agents who can access fundamental financial services and products. On the other hand, the Bank for International Settlements defines financial inclusion as the process of providing, through a sound financial infrastructure that meets customer needs, businesses and households with transparent, affordable, effective, accessible, secure, and high-quality financial products and services to ensure efficient financial system operation. Also, the Organization for Economic Co-operation and Development (OECD) defines financial inclusion as the process which through tailored approaches, financial awareness, and education sessions aims at promoting financial wellbeing ensuring all societal segments access to financial products and services which are timely, affordable, and adequate. Lastly, Alliance for Financial Inclusion (AFI) define financial inclusion as the consistent use by households and businesses of authorized providers\u0026rsquo; high-quality financial products and services to manage cashflows and mitigate shocks (Damane \u0026amp; Ho, 2024). However, the definition given by Ediagbonya \u0026amp; Tioluwani (2023) summarizes all the mentioned definitions above. According to Ediagbonya \u0026amp; Tioluwani (2023), financial inclusion means that all members of society can access, use, and disseminate affordable financial products and services.\u003c/p\u003e\n\u003cp\u003eFinancial inclusion aims at stimulating the accessibility of formal financial services such as credit, insurance, and other forms of equity and their utilization among members of the community and companies. Financial inclusion is one of the components of economic growth and at the same time it helps improve income and employment opportunities of the marginalized groups in the society (Lee Ying et al., 2022).\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e2.2 Institutional theory as a guide to evaluate financial inclusion in Tanzania\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eNorth (1990) defines it as a logic which guides processes and instruments by rules, structures, routines, and schemas, and shapes the commanding pillars influencing social behavior.\u0026nbsp;Scholars such as DiMaggio and Powell (1983) define institutional theory as a framework that describe how environmental attributes such as cultural frameworks, norms as well as formal and informal rules are shaping individuals and organizations. Institutional theory reiterates on how organizational behavior and structure are shaped by institutions, key attributes being the institutional environment, isomorphism, and legitimacy (DiMaggio and Powell, 1983), According to Meyer \u0026amp; Rowan (1977), DiMaggio and Powell ((1983) and Scott (2014), institutional theory has several tenets which include the fact that institutions are accepted social structures that have legitimacy and thus, are able to influence organizational behavior and decision-making; institutions have three pillars which are regulative pillar which shapes organizational behavior (through sanctions, laws and rules), normative pillar which guide organizational behavior (through standards, norms and values), and cultural-cognitive pillar which also shapes organizational behavior (through cultural guidelines, meanings and accepted beliefs; isomorphism, the fact that institutional pressures make organization to be always looking for legitimacy and acceptance, thus, they eventually become similar in practice and structure; legitimacy from the fact that organizations are compelled to abide by the cultural guidelines, rules, and norms so as to gain and keep their legitimacy; attributes forming up institutional environment such as cultural guidelines, professions, and state have influence on organizational structure and behavior; to keep their legitimacy, sometimes, organizations adopt structures and practices figuratively but not practically i.e decoupling; and the last tenet dwells on institutional change in which through deinstitutionalization and other process like institutional work, and institutional entrepreneurship institutions change from time to time.\u003c/p\u003e\n\u003cp\u003eKabigi et al. (2021) use the theory to explain the behavior of land registration agencies in Tanzania. Achmani et al. (2021) apply the theory to evaluate the degree of spatial inclusion. More specifically for financial aspects, Ediagbonya \u0026amp; Tioluwani (2023) use this theory in the context of financial inclusion. Our study considers the World Bank\u0026rsquo;s 2008 \u0026ldquo;Finance for All\u0026rdquo; report and the World Bank\u0026rsquo;s 2017 eight approaches of fostering financial inclusion as institutional pressures towards global states and private financial institutions including those operating in Tanzania. For our study, we assume that financial inclusion is the result of institutional behavior and typers of interactions between all involved or being dependent on financial transactions. Understanding the degree of financial inclusion thus requires not only looking at behavioral artefacts and inter-agency structures (emerging out of regular, standardized or mutually accepted behavior which cause unwritten rules of inter-agency behavior), but also decoding the norms which actors use to include or exclude each other in certain transactions. Therefore, we decided to employ institutional theory as the guiding theory of our study. Though the institutional theory, we were able to understand why and how the selected Tanzanian financial organizations were able to change their practices and structures between 2017 to 2023 to win and maintain legitimacy before the eyes of the international financial organizations.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eInstitutional theory is utilized in explaining when and why financial inclusion occurs, by showing and explaining how markets, governments, societies, and communities behave and follow particular unwritten rules in their initiatives of accessing and excluding finances. The theory helps to unveil whether financial agencies follow deliberate strategies in inclusion or exclusion and whether government organizations actively or passively stimulate financial inclusion through social structures like rules, routines, and norms which regulate social behaviors (Saifurrahman \u0026amp; Kassim, 2023).\u003c/p\u003e\n\u003cp\u003eZooming in to behavior and guiding rules of financial agencies, it is possible to unveil the influence of the eight (8) World Bank\u0026rsquo;s approaches on financial inclusion, which are followed by Tanzania. \u0026nbsp;Tanzania is gradually but steadily improving the rules, structures, routines, and schemas within its financial systems to influence behavior of Tanzanians towards embracing formal financial services and products, thus, paving the way for financial inclusion in urban and rural Tanzania. This is evidenced by\u0026nbsp;\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003ethe role of financial systems,\u0026nbsp;\u003c/li\u003e\n \u003cli\u003ethe behavior of financial agents, and\u0026nbsp;\u003c/li\u003e\n \u003cli\u003ethe degree of financial literacy in creating financially inclusive society in Tanzania.\u0026nbsp;\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e2.3 Evaluation of financial inclusion in Tanzania based on Institution theory\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTo understand financial inclusion in Tanzania between 2017 and 2023, we opted to use institutional theory, considering our created three-dimensional model of financial inclusion, our evaluative criteria is affordability in our IAD framework, thus basing on it, we define the rule, process and outcomes as per Table 1.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 1.\u0026nbsp;\u003c/strong\u003eDefining the three dimensions of financial inclusion in Tanzania 2017 - 2023\u003c/p\u003e\n\u003ctable border=\"1\" cellspacing=\"0\" cellpadding=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 108px;\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 198px;\"\u003e\n \u003cp\u003e\u003cstrong\u003eDefinition\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 306px;\"\u003e\n \u003cp\u003e\u003cstrong\u003eBibliographic References\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 108px;\"\u003e\n \u003cp\u003eRule\u003c/p\u003e\n \u003cp\u003e(Financial systems)\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 198px;\"\u003e\n \u003cp\u003eRules derive processes through creating conducive environment for all segments of the society to access formal financial services easily\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 306px;\"\u003e\n \u003cp\u003e(Zhang, 2018, Agaban \u0026amp; Mpirirwe, 2023;\u0026nbsp;Zhao \u0026amp; Zhu 2017; Morgan, 2022; Soetan et al, 2021; Malik \u0026amp; Sikarwar, 2024; Malala, 2017; Ezzahid \u0026amp; Elouaourti, 2021; Kangwa et al., 2021; Ediagbonya \u0026amp; Tioluwani, 2023; Ezzahid \u0026amp; Elouaourti, 2021; Saifurrahman \u0026amp; Kassim, 2023)\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 108px;\"\u003e\n \u003cp\u003eProcess\u003c/p\u003e\n \u003cp\u003e(Financial agents)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 198px;\"\u003e\n \u003cp\u003eBridge the gap between the rules (financial systems) and the outcomes (financial literacy) by translating the rules into actions through their daily activities \u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 306px;\"\u003e\n \u003cp\u003e(Senyo et al., 2021; Agelyne \u0026amp; Musau, 2021; Lee Ying et al., 2022; Morgan, 2022; Kangwa et al., 2021; Ediagbonya \u0026amp; Tioluwani, 2023)\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\" style=\"width: 108px;\"\u003e\n \u003cp\u003eOutcomes (Financial literacy)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 198px;\"\u003e\n \u003cp\u003eThe evaluative criteria of outcomes through which one can measure how well the process was able to translate and transform the rules\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\" style=\"width: 306px;\"\u003e\n \u003cp\u003e(Jain, 2023; Liebowitz, 2016; Nicolini \u0026amp; Cude, 2022; Malik \u0026amp; Sikarwar, 2024)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003e\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eProsperity of financial inclusion is enabled by the institutionalization of rules which create conducive environment for people from all segments of the population to access and use formal financial services. The financial system is anchored by financial institutions. A financial system is crafted and controlled by the state (Zhang, 2018). The rules are controlled by the state through financial policies. Policies, including Acts approved by parliament, create a conducive environment for financial institutions such as banks and cellular phone companies providing mobile financial services to operate efficiently towards creating a financially inclusive society.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe process simplifies the rules so as to pave the way for the outcomes. In developing economies, daily financial services to the members of the public are provided by the agent thus, improving financial inclusion in the society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time and they are located near trading centers thus, accelerating financial inclusion (Agelyne \u0026amp; Musau, 2021). \u0026nbsp;The established, availability and usage of bank agents has increased financial inclusion to the SMEs (Agelyne \u0026amp; Musau, 2021). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eFor the process to act effectively, it calls for an existence of the ecosystem with several players such as; the FinTech companies - responsible with technology provision to facilitate transactions, technology developing companies - responsible with digital solutions needed by FinTech companies, governments - create and control regulatory frameworks, financial institutions such as banks - the custodians of money, and members of the public - the consumers, users and beneficiaries of the innovated services. The goals of affordability and clarity are fulfilled through the interplay of actors in this ecosystem.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe evaluation of the outcomes is done by analyzing two aspects; the first is how effective the formulated policies, acts, and regulations are and the dissemination of their contents to society; and the second is how user friendly the innovations brought by the technology are. The outcome includes the knowledge possessed by people on the existing financial services and their ability to interact with the appropriate technology to access the stipulated financial services. The outcome is defined by people\u0026rsquo;s ability to access and use the available financial services.\u0026nbsp;\u003c/p\u003e"},{"header":"3. Methodology ","content":"\u003cp\u003eBased on the definitions described in Table 1, we developed indicators on financial inclusion among rural dwellers in Tanzania for each level (rule, process and outcomes). Indicators we developed help in understanding how to detect changes in each level. \u0026nbsp;Changes in the financial system (rules) can be detected through presence of policies supporting innovation, presence of policies supporting access of finance, presence of policies supporting resilient financial system, presence of policies protecting consumer\u0026rsquo;s safety, presence of innovations in the financial systems, number of financial agents, rate of market expansion for financial services, rate of affordability of formal financial services, rate of affordability and convenience of digital financial services, presence of policies supporting financial agency services, and rate of change in the number of savings accounts. Changes in the financial agents (process) are detected through the business working hours of financial agents and the locations of financial agents. Changes in financial literacy (outcomes) are detected through the presence of policies supporting financial education, the presence of bank programs on financial education, and the presence of policies supporting partnership and sharing in the financial sector.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn this study we opted the Institutional Analysis and Development framework to define institutional framework to assess financial inclusion in rural Tanzania. According to Achmani et al., (2021), IAD is a framework that captures a series of scholars\u0026rsquo; efforts to recognize traditions through which institutions conduct their affairs and update themselves from time to time. In the IAD framework, key factors and variables are organized by their relevant categories in a basic structure that depicts logical relationships. The demarcated components of the IAD framework are presented in Figure 1.\u003c/p\u003e\n\u003cp\u003eThe framework is worthy to be used to describe financial inclusion in the Tanzanian society between 2017 and 2023. In our framework, the evaluative criteria consider inclusion through criteria of affordability and simplicity. Our model of financial inclusion is made up by three levels which are; rule, process and outcomes. Eventually, through implementing the evaluative criteria, financial inclusion with its indicators will be defined.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e3.1 Contextualizing the IAD Framework by Three Dimensions: Rule, Process and Outcomes\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eOur three levels in the framework consist of; the input, action arena and outcomes. Financials services providers and the rules created form our input. Our rule level is made up by several attributes manipulating the action area. The concentration of our action arena is on how society members belonging to various population segments are able to access and use the available financials services through simple and secured approaches. Deep examination must show institutions and their actions in simplifying access and usage of financial services and how this is reflected in the outcome. This is a process in which institutions are influencing outcomes. The three-dimensional model and the IAD framework\u0026rsquo;s interaction are presented in Figure 2.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eFigure 2. Approaching the IAD framework by three-dimensional model rule \u0026ndash; process \u0026ndash; outcomes.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e3.2 Describing an Institutional Framework for Financial Inclusion\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u0026ldquo;Evaluative criteria\u0026rdquo; is also applicable as an ingredient of outcomes. Among the key criteria include: (1) diversity of financial institutions; (2) presence of innovative technologies and presence of non \u0026ndash; traditional institutions; (3) expanded agent-based banking; (4) supervised and leveraged technology; (5) implemented risk-based requirements; (6) presence of low\u0026ndash;cost, innovative financial products; (7) strong financial infrastructure; and, (8) protection of consumers by rules for disclosure, fair treatment, and recourse. All 8 of these are relevant and worthy of use to assess the level of outcomes. All 8 are capable of evaluating both the process and the rules.\u003c/p\u003e\n\u003cp\u003eThe goals of diversity of financial institutions are to provide society with a variety of alternatives related to formal financial services for them to choose what they like. The goals of innovative technologies and non-traditional institutions widen the scope of suppliers of financial services thus, adding to more alternatives as it is the case with the goals of the previous criteria. The innovative technologies as well as the supervised and leveraged technologies are customized as per the needs of various population segments in the society. The goals of expanded agent-based banking bring financial services close to the people, thus, cut away a number of inconveniences. \u0026nbsp;The goals of the implemented risk-based requirements and protection of consumers by rules for disclosure, fair treatment, and recourse assure members of the society that it is safe to engage themselves in the formal financial sector. The goals of low -cost innovative financial products are to assure even the low-income earners that their needs are also taken care of, thus, luring them into using formal financial services. Finally, the goals of strong financial infrastructure cement sustainability of all the other goals states earlier. Hence, we reach to our three-dimensional model of financial inclusion showing its relevant indicators as per the rule, process and outcomes. Therefore, our framework is presented in Figure 3.\u003c/p\u003e\n\u003cp\u003eThe arrows in the diagram above denote the existing relationship. As indicated by the arrows, the rules provide guidance for processes to achieve the expected outcomes. Our theoretical framework of financial inclusion has arrows connecting rules to outcomes, and process to outcomes. This simply indicates that we can, from time to time, work on process or rules to verify financial inclusion.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003e3.3\u0026nbsp;\u003c/em\u003e\u003c/strong\u003e\u003cstrong\u003e\u003cem\u003eOperationalization of data collection and analysis\u0026nbsp;\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study focuses on three major factors which result in changes in financial inclusion:\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003efinancial systems,\u0026nbsp;\u003c/li\u003e\n \u003cli\u003efinancial agents, and\u0026nbsp;\u003c/li\u003e\n \u003cli\u003efinancial literacy.\u0026nbsp;\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eFigure 4. presents these factors.\u003c/p\u003e\n\u003cp\u003eThe study employed qualitative data collection methods and a case study design, focusing on selected banks and cellular phone companies in Tanzania. We collected data from the annual performance reports of the National Microfinance Bank (NMB), CRDB Bank and Vodacom Company Limited (VTL). CRDB and NMB are the leading banks in Tanzania in terms of performance and customer base. Vodacom is the leading cellular phone company in Tanzania in terms of the number of customers, products and services. We opted for a purposive convenience sampling to select only these two banks and one cellular phone company. From these two banks and one cellular phone company, annual performance reports of 2017 to 2023 were accessed. The size of these reports varies from 120 pages to 388 pages. The reports portray various contents such as the number of customers, the number of agents and the products and services developed between 2017 and 2023 in CRDB, NMB, and Vodacom. In measuring financial inclusion, we were guided by indicators such as presence of appropriate policies, innovations in the financial systems, number of financial agents, rate of market expansion, rate of affordability of financial services, rate of affordability and convenience of digital financial services, number of saving accounts, working hours of financial agents, locations of financial agents, and presence of bank programs on financial education.\u003c/p\u003e\n\u003cp\u003eThe study utilized a documentary analysis method. This qualitative research method focuses on understanding documents and interpreting social practices, information, and cultural norms. The method focuses on the form of documents, their context, and their content. This study used written documents, which are the annual reports. Seven (7) Policies and Acts such as; Tanzania\u0026rsquo;s first National Financial Inclusion Strategy (NFIS \u0026ndash; 1 2014 \u0026ndash; 2016), National Payment Systems Act (Act No.4 of 2015), Electronic Money Regulations and Payment Services Providers Licensing Regulations of 2015, Tanzania\u0026rsquo;s National Microfinance Policy of 2017, Tanzania\u0026rsquo;s Microfinance Act (Act No.10 of 2018), National Financial Education Program 2021/22 to 2025/26, and National Financial Inclusion Strategy (NFIS \u0026ndash; 3 2023 \u0026ndash; 2028). Eight (8) Vodacom Reports accessed include; Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2024, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2023, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2022, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2021, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2020 \u0026ndash; We connect for a better future, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2019, Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2018, and Vodacom Tanzania Public Limited Company: Annual Integrated Report for the Year ended 31 March 2017. Seven (7) NMB reports accessed include; NMB Integrated Annual Report for the year ended 31 December 2023: Touching Lives Empowering Communities, NMB Annual Report 2022: 25 Years The Journey of Prosperity, NMB Annual Report 2021: A Partner for Shared Growth, NMB Annual Report 2020: Reaching New Heights, NMB Annual Report 2019: Agility Diligence \u0026ndash; Repeat \u0026ndash; The Spirit of Great Banking, NMB Annual Report 2018: Getting Ahead \u0026ndash; Simplifying Banking, Simplifying Life, and NMB Annual Report 2017: The Transformational Journey of NMB - Our Roots, Journey, Destination. Seven (7) CRDB\u0026rsquo;s Annual Reports accessed include; 2023 Integrated Annual Report: Broadening our Horizons, Group and Bank Annual Report 2022: Sustaining Value Creation, CRDB Group and Bank Annual Report 2021: Sustainable Value for Growth, 2020 CRDB Group and Bank Annual Report: Shared Value Through the Times, CRDB Group and Bank Annual Report 2019: Value Beyond Numbers, CRDB Bank PLC Annual Report 2018, and CRDB Bank Annual Report 2017. Annex. explains more on the data collection process.\u003c/p\u003e"},{"header":" 4. Results and Discussion ","content":"\u003cp\u003eThe results and discussion are presented as per the order of the data collection \u0026ndash; analysis \u0026ndash; inference matrix presented (See the Annex).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e4.1 \u0026nbsp; \u0026nbsp; \u0026nbsp;Changes in Financial systems\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe financial system is an arrangement that is institutionally, aiming at protecting costs and enhancing the manner of allocating resources (Zhang, 2018). The standard of living among community members is raised through their ability to invest, save, and accumulate capital promoted by an inclusive financial system. An inclusive financial system ensures efficient financial services, such as safe savings, effective institutions, and sustainable investment (Agaban \u0026amp; Mpirirwe, 2023). The financial system is made up of both financial intermediaries and specialized financial markets. These two are always related to each other (Zhao \u0026amp; Zhu, 2017). The financial services systems bring together regulators, clients and suppliers of services for mechanisms of value storing and systems of payments for transactions to happen (Soetan et al, 2021). Central banks have the mandate as sole regulatory authorities for financial systems (Malala, 2017). Through financial inclusion, the regulated financial system is made accessible, readily available, and used by all members of the community (Malik \u0026amp; Sikarwar, 2024). Emergence of unregulated sources of credits is highly minimized by an inclusive financial system in the economy (Agaban \u0026amp; Mpirirwe, 2023). Our findings on this variable are presented hereunder.\u003cstrong\u003e\u003cem\u003e\u0026nbsp;\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting innovations\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study found out that between 2017 and 2023, Tanzania developed a number of policies which are supporting innovations in the financial sector. In 2017 for example, Tanzania introduced the Tanzania\u0026rsquo;s National Microfinance Policy of 2017 (NMP 2017). This policy replaced the National Microfinance Policy of 2000. The National Microfinance Policy of 2017 was introduced to create favorable conditions for the promotion of financial inclusion through the appropriate and innovative microfinance products and services capable of meeting the demands of the low - income earners, thus reducing poverty to enhance economic growth.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe first policy objective of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 is to promote the development of a robust, inclusive financial sector. Tanzania is doing this through encouraging the use of technology and availability of innovative financial products and services to meet the needs a low - income populations; enhancement of financial education and public awareness on microfinance products and services in Tanzania; and ensuring access to appropriate microfinance products and services at an affordable cost in a fair and transparent manner (MoFP 2017).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThrough the presence of polices supporting innovations in the financial sector in Tanzania, Tanzania had witnessed innovation in financial products and services, especially from the Non \u0026ndash; Financial Institutions (NFIs) which include mobile network operators (MNOs) like Vodacom, Airtel, Tigo (Now Yas) and Zantel and the ways they are manipulating technology to reach out the low - income earners. Manipulation of technology to facilitate payments allows the utilization of mobile phones to make payments through banks and non \u0026ndash; bank institutions. Access to financial services for most of the unbanked and banked Tanzanians is highly facilitated by the mobile network operators in Tanzania (MoFP 2017). Mobile money uptake is facilitated by the mobile network connectivity (Tanzaniainvest 2024). \u0026nbsp;Mobile money uptake in rural areas is also enabled by increasing network connectivity. When rural areas are well connected more rural people are able to access mobile money services. Presence of supportive policies in Tanzania has seen the innovations taking place in the mobile communication sector in Tanzania. The innovation in mobile communication has led to the improvement of the existing products and the introduction of new products. Vodacom financial products include; M-Pesa overdraft \u0026ldquo;Songesha\u0026rdquo;, Savings and loans (M-Pawa, M-Godi and Halal Pesa), Group savings (M-Koba and Changisha), Agents Term Loans, and Insurance services (Vodacom, 2024). Airtel Tanzania\u0026rsquo;s financial products include; Airtel \u0026ldquo;Vikoba\u0026rdquo;, \u0026ldquo;Kamilisha\u0026rdquo;, \u0026ldquo;Timiza\u0026rdquo;, \u0026ldquo;Timiza Akiba\u0026rdquo;, and \u0026ldquo;AFYA Bima\u0026rdquo; (Airtel Tanzania, 2025). Tigo Tanzania\u0026rsquo;s financial products include; \u0026ldquo;Nivushe\u0026rdquo; Plus (Tigo Pesa overdraft). Particularly, Vodacom Tanzania introduced M \u0026ndash; Koba in 2019 to increasing the saving ability among Tanzanians. M \u0026ndash; Koba is a digital saving technology and is one of the MPesa products (GSMA 2023). Saving is a key aspect of financial inclusion.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn 2023, the number of mobile subscribers in Tanzania jumped to 64.09 million subscribers. This is an addition of 20.67 million subscribers, equivalent to 47.4 per cent. Vodacom Tanzania, in particular, had the number of its subscribers jump to 19.12 million (Statista, 2025). \u0026nbsp;Most of the mobile subscribers are located in rural Tanzania since according to the United Republic of Tanzania (2024), by 2022, rural dwellers in Tanzania accounted for 65 percent of the total population of Tanzania which was 62 million by 2022. This means that by 2022, Tanzania had 40 million rural dwellers.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eBy 2023, mobile money subscribers doubled in Tanzania compared to the past five years. Mobile money subscribers in Tanzania increased from 25.8 million to 55.8 million between 2019 and 2023. This is associated with an increase in transactions from 3 billion to 5.3 billion Tanzanian Shillings (TZS) during the same period, conducted through mobile money services (Developing Telecoms, 2024). The spread of mobile moneys services In Tanzania has pulled more people into formal financial services.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting access to finance\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study found out that in 2018, Tanzania enacted the Tanzania\u0026rsquo;s Microfinance Act of 2018 in order to stimulate financial inclusion in Tanzania. As per the United Republic of Tanzania (2018), this Act was enacted to provide for the licensing, regulation and supervision of microfinance business; and to make provisions for related matters. Specifically, the Microfinance Act of 2018 administers the following areas; licensing of microfinance service providers under tiers 2 and 3, Registration of microfinance service providers under tier 4, Management and supervision of microfinance service providers and Microfinance consumer protection.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eWe also found out that Tanzania\u0026rsquo;s National Microfinance Policy of 2017 is also supporting access to finance. The focus of policy objective one of Tanzania\u0026rsquo;s National Microfinance Policy 2017 is placed on promoting the development of a robust, inclusive financial sector. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThrough Tanzania\u0026rsquo;s Microfinance Act of 2018, Village Community Banks (VICOBA) and Savings and Credit Cooperative Societies (SACCOSS) are legally established. VICOBA is a rural development model that helps members to access credit (Ngalemwa 2013). Members of VICOBA enjoy such benefits as loans and opportunities for business training, which, on the other hand, assist members to establish more income-generating activities, thus able to own assets like livestock, land, farms and houses (Jollystar \u0026amp; Lyimo 2023). Tanzania has a total of 1,283 SACCOSS as of 3\u003csup\u003erd\u003c/sup\u003e December 2023, out of which 671 SACCOSS are from five regions, which are Arusha, Dar es Salaam, Kilimanjaro, Mbeya and Tanga. These are the five regions with the highest number of SACCOSS in Tanzania. On the other hand, the five regions with the fewest SACCOSS in Tanzania are Katavi, Lindi, Mtwara, Simiyu, and Songwe. In total, they have only 36 SACCOSS (TCDC 2023). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003ePolicy objective one of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 aims at promoting the development of a robust, inclusive financial sector. The government of Tanzania is doing this by encouraging utilization of technology and promoting the presence of innovative financial products and services which target the low \u0026ndash; income segments of the population. In this same policy objective, the government of Tanzania is promoting access to appropriate microfinance products and services at costs affordable to low\u0026ndash;income segments of the population in a transparent and fair manner. Between 2017 and 2023, Tanzania has seen appropriate use of technology in the financial sector, which has made it possible for the presence and spread of financial products even to the low\u0026ndash;income segments of society. Presence of financial agents vindicate this. Financial products by mobile financial providers in Tanzania is another good example of this. Access to finance in Tanzania is improving financial inclusion to the financially excluded Tanzanians.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting a resilient financial system\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eOne of the policy objectives of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 is to attain sustainability of microfinance service providers. The government of Tanzania is achieving this financial policy objective by promoting financial market development in the microfinance sub-sector, ensuring sustainable capacity building in the microfinance sub-sector, and encouraging the mainstreaming of community financial groups into the financial system. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eFurthermore, Tanzania\u0026rsquo;s Microfinance Act of 2018 is responsible for licensing microfinance businesses and their management (TCDC 2023). This role is played by the central bank of Tanzania, and by so doing, it strengthens Tanzania\u0026rsquo;s financial policy.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe financial system is an arrangement that is institutionally, aiming at protecting costs and enhancing the manner of allocating resources. It is both, tangible frameworks and an outcome of interdependent evolutions. A financial system is crafted and controlled by the state (Zhang, 2018). Resilience of the financial system is seen in its ability to keep the cost affordable while maintaining the allocation of resources. This study found out that, through the use of monetary policy instruments, the central bank of Tanzania is influencing the cost of borrowing and money supply in the economy. The monetary policy of the central bank of Tanzania is built on a framework which manages price stability for the balanced and sustainable growth of Tanzania\u0026rsquo;s economy (BoT 2025). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eTanzania\u0026rsquo;s National Microfinance Policy of 2017 also plays its part in making Tanzania\u0026rsquo;s financial systems resilient. The determination of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 to create a resilient finance system in Tanzania deeply rooted in its vision and mission. Tanzania\u0026rsquo;s National Microfinance Policy of 2017 envisions a stable, vibrant and inclusive microfinance subsector. This will be achieved though creating legal and regulatory environment that ensures growth of strong microfinance institutions that delivers inclusive financial services to low-income individual, households and enterprise through innovative, diversified, sustainable, affordable and easily accessible financial services. These will be complemented with promotional of the development of a robust, inclusive sector, attaining sustainability of microfinance service providers\u0026rsquo;, creating legal and regulatory framework for effective and efficient delivering of microfinance, promotion of research, innovation and product development in microfinance sub-sector, strengthening of regional and international cooperation in microfinance sub-sector, and encouraging of adherence to principles of good governance in microfinance sub sector (MoF 2017). An inclusive and strong microfinance subsector plays a great role in making the financial system resilient. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003ePolicy objective one of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 aims at promoting the development of a robust, inclusive financial sector. The government of Tanzania is doing this by encouraging utilization of technology and promoting the presence of innovative financial products and services which are targeting the low \u0026ndash; income segments of the population. In this same policy objective, the government of Tanzania is promoting access of appropriate microfinance products and services at costs affordable to low \u0026ndash; income segments of the population in a transparent and fair manner. \u0026nbsp;This strengthens Tanzania\u0026rsquo;s financial system needed for financial inclusion.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eSimilarly, policy objective three of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 aims at creating a legal and regulatory framework for effective and efficient delivery of microfinance services. The government of Tanzania is fulfilling this by enhancing legal, regulatory and supervisory oversight in the microfinance sub-sector, enforcing consumer protection in the microfinance sub \u0026ndash; sector, and enhancing information sharing infrastructure among regulators in the microfinance sub \u0026ndash; sector. A strong legal environment creates a strong and resilient financial system which catalyze the blossoming of financial inclusion in Tanzania.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies protecting consumers\u0026rsquo; safety\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBetween 2017 and 2023, Tanzania developed regulations which are meant to protect financial customers. Specifically, to financial service providers, the regulations compel financial service providers to; have in place a structure of governance that will ensure effective implementation of consumer protection in accordance with the provisions of consumer protection in accordance with the provisions of these regulations; put in place internal controls including effective assurance functions for consumer protection such as internal audit and compliance functions, governance policies and structures; have in place appropriate financial consumer protection policies which are consistent with the provisions set forth in these regulations; annually review financial consumer protection policies and submit to the Bank the revised policies indicating all changes made therein not later than thirty days after its Board\u0026rsquo;s approval; and report financial consumer protection matters to the Bank in the form and at the time prescribed by the Bank (URT 2019).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe Bank of Tanzania issued financial consumer protection regulations in 2019. These regulations include laws, institutions, practices, and policies to protect consumer rights, enabling consumers to make informed financial decisions and ensuring fairness in the provision of products and services by financial service providers. The financial consumer protection regulations in Tanzania cover a number of areas, such as; governance by financial service providers, fair and equitable treatment of consumers, financial education and awareness, disclosure and transparency, responsible business conduct, protection of consumers\u0026rsquo; assets and information, competitive environment, consumer handling mechanism, and enforcement and sanctions (URT 2019). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eAssurance of consumer protection attracts more Tanzanians into using formal financial services.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of innovations in the financial systems\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTanzania has more than 44 registered formal banks (BOT 2024). However, we decided to sample only two banks that have shown strong performance in recent years. These two banks are CRDB Bank and the National Microfinance Bank (NMB). The findings in this section are highly influenced by integrated annual reports released from 2017 to 2023 by CRDB Bank and the National Microfinance Bank (NMB). A series of innovations had been done in the banking industry in Tanzania between 2017 and 2023, where both, CRDB and NMB did their best to pull in the low - income earners into the formal financial services. This has been done through the innovation of affordable financial products such as CRDB\u0026rsquo;s Hodari program and Tanzania\u0026rsquo;s National Microfinance Bank (NMB)\u0026rsquo;s \u0026ldquo;Chap Chap Account\u0026rdquo;, and \u0026ldquo;Fanikiwa Account\u0026rdquo;. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eHodari program is a financial inclusion initiative innovated by CRDB. It is executed through the opening up of the business bank account known as \u0026ldquo;Hodari Account\u0026rdquo; which is targeting the Micro \u0026ndash; Small Enterprises (MSE) segment including women operating either formal or informal. To make it more effective and efficient, the \u0026ldquo;Hodari Account\u0026rdquo; has a zero minimum operating balance, zero maintenance fee and zero withdrawal charges on all CRDB channels of payment. Through this account, the formerly financially excluded individuals are now making deposits, receiving money, making payments, receiving payments, withdrawing and setting up standing orders through formal financial procedures, hence, financially included (CRDBBANK 2024). Rural dwellers are also targeted by this campaign. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eTanzania\u0026rsquo;s National Microfinance Bank (NMB), on the other hand, has done some significant innovative initiatives on attracting financial inclusion to the financially excluded, such as rural dwellers. Among these is the creation of an instant account aiming at helping individuals, including women, to overcome remarkable challenges of financial inclusion. This instant account is known as \u0026ldquo;Chap Chap Account\u0026rdquo;. An individual needs to possess only a valid ID card to open this account. Among the unique features of this account is the fact that it does not have a monthly account maintenance fee. In this way, a good number of financially excluded individuals are gradually becoming included (NMBBANK 2024). \u0026nbsp;NMB Fanikiwa Account is another NMB initiative on financial inclusion. This is a customized account aiming at attracting individuals including rural dwellers owning Micro and Small Enterprises (MSE). Owners of this special account are eligible to attend capacity building programs and other networking programs organized through the NMB Business Club. They are also eligible for a free NMB Faraja Insurance policy while enjoying unlimited transactions on their accounts (NMBBANK 2024). These measures are meant to ensure that no member of the Tanzanian society, including rural dwellers, is left behind. The result of these measures is a reduction in the Tanzanian rural dwellers who are financially excluded, as explained hereunder.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eAll these are targeting the low-income earners, mostly rural dwellers, for financial inclusion. By so doing, these two banks are in line with the sixth World Bank\u0026rsquo;s approach on financial inclusion, which is encouraging the development of low\u0026ndash;cost, innovative financial products. Innovation is key in Tanzania\u0026rsquo;s financial inclusion journey.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eNumber of Financial agents\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe CRDB and Tanzania\u0026rsquo;s National Microfinance Bank (NMB) have chains of \u0026ldquo;WAKALA\u0026rdquo; (Agents) who operate through Point of Sale (POS) machines to perform the various banking services thus increasing the scope of service outlets to customers. This fits into the third World Bank\u0026rsquo;s approach on financial inclusion, which is expanding agent\u0026ndash;based banking and other cost\u0026ndash;effective delivery channels. \u0026nbsp;Between 2017 and 2023, Tanzania\u0026rsquo;s National Microfinance Bank (NMB) had 3,785 bank agents \u0026ldquo;Wakala\u0026rdquo;. During the same period, CRDB Bank had 3,286 bank agents (NMB 2017 and CRDB 2017). However, in 2023, the number of NMB bank agents rose to 28,295 banks agents. On the other hand, CRBD Bank had 34,627 bank agents (NMB 2023 and CRDB 2023). This is summarized in Figure 5.\u003c/p\u003e\n\u003cp\u003eTanzania has seen an increase in the number of financial agents between 2017 and 2023. In developing economies, daily financial services to the members of the public are provided by the agent, thus improving financial inclusion in the society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time and they are located near trading centers thus, accelerating financial inclusion (Agelyne \u0026amp; Musau, 2021). Mobile money services are so convenient to individuals who are in constant need of financial services like obtaining micro-credits, recharging their airtime, paying bills) such as electricity and water bills) and fees (such as school fees), insurance services, money transfer, recharging their data bundles, and depositing cash (Senyo et al., 2021).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eBeing a developing economy, Tanzania is gradually improving its financial inclusion status through a sharp increase in the number of financial agents.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eRate of Market expansion for financial services\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFinancial inclusion in developing economies is currently influenced by the financial transactions performed without the need for a bank account, and they are facilitated by a FinTech innovation, which is mobile money (Senyo et al., 2021). As per the GSM Association, mobile money services are associated by features such as; utilizing mobile phone to do financial transactions, being present to individuals without ownership of bank accounts, and possessing a network made of agents that allows physical transactions beyond ATMs and bank branches still customers can deposit and withdraw cash (Morgan, 2022). Mobile money which is one of the digital finance services is a source of revenue (Kangwa et al., 2021). Mobile banking is impacting positively both; financial inclusion and levels of income (Ezzahid \u0026amp; Elouaourti, 2021). Money benefits firms and individual clients thus, financial services are useful in everyday interactions (Soetan et al., 2021). Internet and mobile phones facilitate acquisition of digital financial services cheaply and conveniently (Ezzahid \u0026amp; Elouaourti, 2021). The heterogenous nature of mobile money operators involve both; cooperation and competition through well-defined boundaries and coordination leading to the realization of a common goal (Senyo et al., 2021). Introduction of mobile payment system in the developing economy can be interpreted as both; political development and economic development as well (Malala, 2017). The rural challenges such as remittance costs and remoteness are resolved through mobile banking services provided by the Fintech to rural dwellers (Ezzahid \u0026amp; Elouaourti, 2021). Mobile payments have increased public engagement in the formal financial system, through the opening of savings accounts in financial intermediaries that are regulated (Malala, 2017). The saving behavior is highly influenced by the provision of financial services via mobile phones (Ezzahid \u0026amp; Elouaourti, 2021). Compared to other modalities, mobile money transactions benefit unbanked and underbanked individuals significantly. The benefits include low costs which is a result of utilizing the already established mobile network thus, it creates profit even out of transactions which are comparatively low in volume. Also, a bank branch network is more costly than an agent network, whereas mobile money transactions are facilitated by an agent network. Lastly, with a proper and minimal documentation, it is able to swallow in a large proportion of the members of community who are not banked (Morgan, 2022). \u003cstrong\u003e\u003cem\u003e\u0026nbsp;\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eAs per the data we collected, the findings in this section are explained based on the trend of the mobile money customers in Tanzania. This section is highly influenced by the Vodacom Tanzania Public Limited Company: Annual Integrated Reports released from 2017 to 2024. However, annual reports of other mobile operators in Tanzania could not be obtained, so we had to access information released by other authorities to fill the information gap left by their absence. Mobile money uptake is facilitated by the mobile network connectivity (Tanzaniainvest 2024). \u0026nbsp;\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn 2017, Tanzania\u0026apos;s six mobile operators had a total of 43.47 million subscribers. Vodacom Tanzania in particular, had 14.14 million subscribers in 2018 (Statista, 2025). As per the Vodacom Tanzania\u0026rsquo;s Annual Integrated Report of 2018, 63 per cent of all Vodacom Customers uses Vodacom financial services (Vodacom, 2024). Trend of Vodacom customers and Vodacom M-Pesa customers between 2017 and 2023 is summarized in Figure 6.\u003c/p\u003e\n\u003cp\u003eBy 2023, mobile money subscribers doubled in Tanzania as compared to the past five years. \u0026nbsp;Mobile money subscribers in Tanzania escalated from 25.8 million to 55.8 million between 2019 and 2023 respectively. This is associated with escalated number of transactions from 3 billion to 5.3 billion Tanzanian Shillings (TZS) during the same period, done through mobile money services. Nonetheless, the number of mobile phone subscribers escalated to 76.6 million from 43.7 million between 2019 and 2023 (Developing Telecoms, 2024). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eBy 2023, the number of mobile subscribers in Tanzania jumped to 64.09 million subscribers. This is an addition of 20.67 million subscribers, equivalent to 47.4 per cent. Vodacom Tanzania in particular, had the number of its subscribers jumped to 19.12 million (Statista, 2025). \u0026nbsp;Most of the mobile subscribers are located in rural Tanzania since according to the United Republic of Tanzania (2024), by 2022, rural dwellers in Tanzania accounted for 65 percent of the total population of Tanzania which was 62 million by 2022. This means that by 2022, Tanzania had 40 million rural dwellers. Trend of mobile subscribers among mobile phone operators between 2018 and 2023 is summarized in Figure 7.\u003c/p\u003e\n\u003cp\u003ePresence of supportive policies in Tanzania has seen innovations taking place in the mobile money sector in Tanzania. The innovation in mobile communication has led to the improvement of the existing products and the introduction of new products. Vodacom financial products include; M-Pesa overdraft \u0026ldquo;Songesha\u0026rdquo;, Savings and loans (M-Pawa, M-Godi and Halal Pesa), Group savings (M-Koba and Changisha), Agents Term Loans, and Insurance services (Vodacom, 2024). Airtel Tanzania\u0026rsquo;s financial products include; Airtel \u0026ldquo;Vikoba\u0026rdquo;, \u0026ldquo;Kamilisha\u0026rdquo;, \u0026ldquo;Timiza\u0026rdquo;, \u0026ldquo;Timiza Akiba\u0026rdquo;, and \u0026ldquo;AFYA Bima\u0026rdquo; (Airtel Tanzania, 2025). Tigo Tanzania\u0026rsquo;s financial products include; \u0026ldquo;Nivushe\u0026rdquo; Plus (Tigo Pesa overdraft). Particularly, Vodacom Tanzania introduced M \u0026ndash; Koba in 2019 to increasing the saving ability among Tanzanians. M \u0026ndash; Koba is a digital saving technology and is one of the MPesa products (GSMA 2023). Saving is one of the key aspects of financial inclusion. Mobile money uptake in rural areas is also enabled by increasing network connectivity. When rural areas are well-connected, more rural people are able to access mobile money services and other formal financial services.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eRate of affordability of formal financial services\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBoth, CRDB and NMB have been trying their best to pull in the low - income earners into the formal financial services. This has been done through the development and introduction of affordable financial products. Good examples here are; CRDB\u0026rsquo;s Hodari program and The Tanzania\u0026rsquo;s National Microfinance Bank (NMB)\u0026rsquo;s \u0026ldquo;Chap Chap Account\u0026rdquo;, and \u0026ldquo;Fanikiwa Account\u0026rdquo;. All these three are targeting the low - income earners mostly rural dwellers into the financial inclusion. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eFinancial inclusion is the act of accessing financial assets and formal loans to alleviate income inequality (Kling et al, 2020). According to Ediagbonya \u0026amp; Tioluwani (2023), financial inclusion means making members of the community especially the low-income earners, the poor and marginalized able to be provided with financial services and able to access them (Ediagbonya \u0026amp; Tioluwani, 2023).\u003c/p\u003e\n\u003cp\u003eThe presence of such products as the CRDB\u0026rsquo;s \u0026ldquo;Hodari\u0026rdquo; program and the NMB\u0026rsquo;s \u0026ldquo;Chap Chap Account\u0026rdquo; and \u0026ldquo;Fanikiwa Account\u0026rdquo;, which are targeting low-income earners, increase financial inclusion in Tanzania. The affordability of financial products and services in Tanzania increases financial inclusion among Tanzanians.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eRate of affordability and convenience of digital financial services\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eWe describe rate of affordability and convenience of digital financial services by looking at the number of people who were able to afford a specific financial service in 2017 as compared with the number affording the same service in 2023. that, between 2017 and 2023, there have been several changes in the number of recipients of financial services in Tanzania. Some of these changes include: increase in the number of NMB account holders from 2.2 million account holders in 2017 to 7.1 million account holders, also the number of mobile money subscribers in Tanzania increased from 25.8 million in 2019 to 55.8 million in 2023, and the number of CRDB bank agents has increased from 3,286 in 2017 to 34,627 in 2023. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eAccording to Sathish \u0026amp; Vidya (2025), change of affordability and convenience of digital financial services is influenced by technological infrastructure, security, regulatory environment, financial literacy, and digital literacy, trust, and skills.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eTanzania has seen several improvements in technological infrastructure, security, regulatory environment, financial literacy, digital literacy, trust, and skills. Tanzania\u0026rsquo;s National Microfinance Policy of 2017 (NMP 2017) supports development and improvement in technological infrastructure, digital literacy, trust, and a friendly financial regulatory environment. On the other hand, the Bank of Tanzania financial (consumer protection) regulations of 2019 support financial security, a friendly financial regulatory environment, and financial literacy. In addition to that, Tanzania\u0026rsquo;s Microfinance Act of 2018 also supports a friendly financial regulatory environment. Based on these friendly financial policies, digital financial services become more affordable and convenient in Tanzania, leading to more financial inclusion.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting financial agency services\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe presence of financial agents is supported by Tanzania\u0026rsquo;s National Microfinance Policy 2017. The first policy objective of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 is to promote the development of a robust, inclusive financial sector. Tanzania is doing this through encouraging the use of technology and availability of innovative financial products and services to meet the needs a low - income populations; enhancement of financial education and public awareness on microfinance products and services in Tanzania; and ensuring access to appropriate microfinance products and services at an affordable cost in a fair and transparent manner (MoFP 2017).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn developing economies, daily financial services to the members of the public are provided by the agent, thus improving financial inclusion in the society (Senyo et al., 2021). Financial agents are more common in developing economies where as a single person or small firms, they provide digital financial services including cash deposits and withdrawals similar to bank branches. Unlike bank branches, financial agents offer services such as airtime sales, mobile money transfers, and mobile money registrations (Senyo et al., 2021). \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eProvisions of Tanzania\u0026rsquo;s National Microfinance Policy 2017 first objective open doors to financial institutions such as banks to innovate suitable products which are compatible with the needs of the financial consumers at affordable prices. One of such products is agency banking. Financial agents have proved to be effective in Tanzania\u0026rsquo;s financial inclusion journey.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eRate of change in the number of savings accounts\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThere have been positive changes in the number of saving accounts within NMB and CRDB. The collected data from these two banks show that between 2017 and 2023, Tanzania\u0026rsquo;s National Microfinance Bank (NMB) had 2.2 million customers. During the same period, The CRDB Bank had less than 1.5 million customers (NMB 2017 and CRDB 2017). However, in 2023, the number of NMB customers rose to 7.1 million. On the other hand, the CRBD Bank had more than 4 million customers (NMB 2023 and CRDB 2023). \u0026nbsp;This is summarized in Figure 8.\u003c/p\u003e\n\u003cp\u003eVariables for measuring the rate of financial inclusion in the society include; Number of commercial bank branches (per 100,000 adults), Number of ATMs (per 100,000 adults), Domestic credit provided by the financial sector (% of GDP), and Net national savings (% of GNI) (Nasution et al.,2022; Damane \u0026amp; Ho, 2024; Malik \u0026amp; Sikarwar, 2024).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eBoth NMB and CRDB banks have seen an increase in the number of their customers, specifically, account holders from 2.2 million to 7.1 million and from less than 1.5 million to more than 4 million customers, respectively. The changes in the number of saving accounts within NMB and CRDB are attributed to several factors, improving financial inclusion in Tanzania. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e4.2 \u0026nbsp; \u0026nbsp; \u0026nbsp;Changes in Financial agents\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eIn developing economies, daily financial services to the public are provided by agents, thereby improving financial inclusion in society (Senyo et al., 2021). Bank agents are more preferred since their working hours are extended, they are available almost all the time, and they are located near trading centers, thus accelerating financial inclusion (Agelyne \u0026amp; Musau, 2021). \u0026nbsp;Agents are more common in developing economies where as a single person or small firms, they provide digital financial services including cash deposits and withdrawals similar to bank branches. However, with agents, the services are extended to airtime sales, transfers of mobile money and registrations of mobile money (Senyo et al., 2021). The established, availability and usage of bank agents has increased financial inclusion to the SMEs (Agelyne \u0026amp; Musau, 2021). \u0026nbsp;Mobile money services are so convenient to individuals who are in a constant need of financial services like obtaining micro-credits, recharging their airtime, paying bills) such as electricity and water bills) and fees (such as school fees), insurance services, money transfer, recharging their data bundles, and depositing cash. In the world of mobile money, the combination of old and new players assigns each its unique role to ensure cooperation and fair competition. There are five players in this ecosystem; the FinTech companies - responsible with technology provision to facilitate transactions, technology developing companies - responsible with digital solutions needed by FinTech companies, governments - create and control regulatory frameworks, financial institutions such as banks - the custodians of money, and members of the public - the consumers, users and beneficiaries of the innovated services (Senyo et al., 2021). Our findings on financial agents are presented hereunder.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eBusiness working hours of financial agents\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBased on the collected data from NMB and CRDB, the segment of bank agents saw a dramatic positive increase between 2017 and 2023. The collected data show that among the good things related to bank agents is the fact that bank agents are located close to communities as compared to the formal bank branches. Nonetheless, observation shows that some bank agents offer financial services up to midnight and a few of them remain open 24 hours, 7 days a week. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eUnlike bank branches, many financial agents operate from morning hours to midnight. Nonetheless, some financial agents operate 24 hours. This fact makes financial agents favorites among customers who need financial services at any time of day. Being open till night means that people can make a deposit of their cash at any time, including late-night hours, thus keeping their cash safe and out of any danger, which can happen if they keep their cash at home. The most popular dangers associated with keeping cash at home include theft, fire, or being destroyed by rabbits, or rainfall in substandard houses of rural areas. Rural people like farmers who conduct their daily post-harvest businesses till late at night are among the major beneficiaries of financial agents. The presence of financial agents attracts rural dwellers to formal financial services.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003eLocations of financial agents\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTanzania has a total of 206 local administration councils. Of them, 141 are rural local administration councils, and 139 are located in rural areas of Tanzania Mainland (URT 2024). According to the CRDB Integrated Annual Report, CRDB bank services are available in all 195 local administration councils of Tanzania Mainland, including the 139 councils located in rural Tanzania (CRDB 2020). CRDB banking agents are also found all over Tanzania, including rural Tanzania. \u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eCRDB Bank and NMB Bank are the two banks with the widest networks of services in Tanzania. With the aid of fintech innovations, CRDB Bank and NMB Bank have been able to extend agent banking all over Tanzania, even in rural areas. Financial agents are located in people\u0026rsquo;s vicinity thus, bringing formal financial services close to excluded segments of the community. Bank agents recruited by CRDB assisted 284,056 customers in opening bank accounts with CRDB in 2017 (CRDB 2018). The widespread presence of financial agents even in rural areas of Tanzania, has increased the portion of population which is using formal financial services.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e4.3 \u0026nbsp; \u0026nbsp; \u0026nbsp;Changes in Financial Literacy\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFinancial literacy is the capability to; craft and implement sound decisions on the utilization and control of money; apply facts and skills to control resources related to financial matters for everlasting financial wellbeing; perceive finance, planning, implement saving and craft wealth accumulation strategy; and to utilize understanding of financial facts and risks, motivation in making sound decisions in various financial situations so as to enhance financial well \u0026ndash; being of the members and the whole society, thus facilitating their participation in building their economy (Jain, 2023; Liebowitz, 2016; Nicolini \u0026amp; Cude, 2022)). Financial literacy aims at achieving four goals, which are: raising awareness and accessibility to financial education, fixing and mixing fundamental financial competencies, expanding financial education set\u0026ndash;up, and recognizing, strengthening, and communicating best practices (Liebowitz, 2016). Financial education is a set of interventions designed to change components of financial literacy (Nicolini \u0026amp; Cude, 2022). Our findings on financial literacy are presented in the following details.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting financial education\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe Bank of Tanzania (Financial Consumer Protection) Regulations (2019) issued by the Government Notice number 884 of 2019, among other things, is supporting financial education. Part IV of the Bank of Tanzania (Financial Consumer Protection) Regulations, 2019 is dedicated to financial education and awareness. In Tanzania, this is done by compelling financial service providers to develop a consumer strategy, defining and segmenting the market with needs and communication preferences. The Bank of Tanzania demands that the developed strategies should clearly define market segments, key financial needs and messages, appropriate channels for reaching the market segments, and mapping of stakeholders for effective financial education delivery. \u0026nbsp;\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn Tanzania, financial service providers are required by the Bank of Tanzania (Financial Consumer Protection) Regulations (2019) to develop financial education programs that consider consumers\u0026apos; location, gender, education levels, abilities, and occupation (BoT 2019). The developed financial programs are supposed to be cost-effective, capable of influencing financial behavior, easily understood, aiming at providing advice and not acting as a marketing program, and materials should be in English and Kiswahili so as to be understood by all members of the community. To ensure all these are done, financial service providers are required to develop communication strategies, and also to establish mechanisms for monitoring and evaluation to track and assess their financial education campaigns and programs. \u0026nbsp;Well-crafted financial education programs in Tanzania are proving effective in attracting more Tanzanians into formal financial services.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of bank programs on financial education\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u0026nbsp;CRDB, as a member of the banking sector, has been implementing financial education programs by conducting a number of campaigns aiming at attracting financially excluded segments of the community, such as rural dwellers, to subscribe to their products and services. The most popular CRDB\u0026rsquo;s financial education program is \u0026ldquo;Zogo Mchongo\u0026rdquo; initiative. \u0026ldquo;Zogo Mchongo\u0026rdquo; is part and parcel of the CRDB\u0026rsquo;s Financial Education Plan (2021/22 \u0026ndash; 2025/26) aiming at creating financial awareness to a wider segment of the Tanzania population for prosperous financial inclusion. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe CRDB\u0026rsquo;s financial education program is operated as an information and entertainment TV program broadcast by Clouds TV. Its main focus is to raise the community\u0026rsquo;s awareness of the formal financial services, hence increasing their usage among the members of the community. Thus, tapping the financially excluded individuals into the formal financial sector (CRDBBANK 2024). Rural dwellers are also targeted by this campaign. The impact of the CRDB\u0026rsquo;s financial education programs is reflected in the increase in the number of customers who are opening bank accounts with CRDB and other banks such as NMB in Tanzania. The more people with saving accounts in the population the more financially inclusive is the society. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cem\u003ePresence of policies supporting partnership and sharing in the financial sector\u003c/em\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTanzania\u0026rsquo;s National Microfinance Policy of 2017 supports partnership and sharing in the financial sector. One of the policy objectives of the NMP 2017 is to strengthen regional and international cooperation in the microfinance sub-sector. In this objective, the government of Tanzania is collaborating with stakeholders in the financial industry in Tanzania to domesticate regional and international treaties, protocols, and Memoranda of Understanding on microfinance matters, and to deepen cross-border coordination and cooperation among regulators to promote the orderly provision of financial services in the region (MoFP 2017). \u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003ePolicy objective five of Tanzania\u0026rsquo;s National Microfinance Policy of 2017 is to strengthen regional and international cooperation in the microfinance sub-sector. This objective is the response to the number of ratified protocols which Tanzania has signed with international and regional bodies such as the East African Community (EAC), the South African Development Community (SADC), the African Union (AU), and the International Microfinance Network. All these bodies call for harmonization in financial policies, laws and systems for financial inclusiveness. \u0026nbsp;\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe domestication of regional and international Memoranda of Understanding, protocols and treaties, on microfinance and financial matters, strengthen reginal and international interaction among financial regulators to offer best quality financial services in Tanzania and other related countries. As a result, Tanzania is gradually improving its financial inclusion status.\u003c/p\u003e"},{"header":"5.\tConclusion and Policy Recommendations ","content":"\u003cp\u003eThe findings of this study on financial inclusion in Tanzania: A justification for the shrinking of the gap among the rural dwellers have found that between 2017 and 2023, there have been several changes in financial systems, financial agents, and financial literacy in Tanzania. These changes are evidenced by various indicators such as presence of policies supporting innovations, presence of policies supporting access to finance, presence of policies supporting resilient financial system, presence of policies protecting consumer\u0026rsquo;s safety, presence of innovations in the financial systems, number of financial agents, rate of market expansion for financial services, rate of affordability of formal financial services, rate of affordability and convenience of digital financial services, presence of policies supporting financial agency services, and rate of change in the number of savings accounts on financial systems; and business working hours of financial agents, and locations of financial agents on financial agents; and presence of policies supporting financial education, presence of bank programs on financial education, and presence of policies supporting partnership and sharing in the financial sector on financial literacy. However, it is the policies, Acts and regulations which have stimulated other changes and made a significant improvement in the financial inclusion in Tanzania between 2017 and 2023. During this period, Tanzania developed a number of policies which are supporting innovations in the financial sector. These include; the National Microfinance Policy of 2017, the Microfinance Act of 2018 and the Bank of Tanzania (Financial Consumer Protection) Regulations (2019). Through policies, Acts and regulations which are supporting formation of resilient financial systems, access to finance, financial agency services, financial education protection of consumer\u0026rsquo;s safety in financial sector and partnerships and sharing in the financial sector, several changes were possible in financial inclusion in Tanzania between 2017 and 2023 and pulled more people into formal financial services thus, Tanzania is gradually but steadily improving its financial inclusion status.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003ePolicymakers should focus on institutional adjustments which will make banking products available, accessible, affordable, and usable to low-income groups and rural dwellers for a vibrant financial inclusion in Tanzania.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003e5.1\u003c/strong\u003e \u003cstrong\u003eStudy Limitations and Future Recommendations\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eOn mobile money services, it is only annual reports of Vodacom Tanzania Limited which are available and accessible online. Without this limitation, role of mobile money services would have been presented in a relatively broader picture. The fact that potential of banking is still not much tapped in Tanzania, further studies should investigate how policies can influence rural dwellers into financial inclusion through banking.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eData Availability Statement:\u003c/strong\u003e\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConsent to Publish declaration:\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eNot applicable\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eEthics Approval\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eNot applicable.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eClinical Trial Number\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eNot applicable.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConsent to Participate declaration\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eNot applicable.\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eFunding\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThere is no external funding for this research. \u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eCompeting Interests\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe authors declare that they have no competing interests. \u0026nbsp;\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eProf. WV (Walter Timo de Vries) proposed and clarified the research idea, developed the methodology, cross-checking analysis techniques, reviewed the overall manuscript, and guided the entire process of the study. KPK (Kiula Peter Kiula) wrote the main manuscript text, designed the theoretical framework, literature review, collected data, analyzed the collected data, formulated the conclusion of this study. All authors read, agreed and approved the final manuscript.\u003c/p\u003e"},{"header":"References","content":"\u003cp\u003eAchmani, Y., W. T. d. Vries, J. Serrano, and M. Bonnefond. (2020). Determining indicators related to land management interventions to measure spatial inequalities in an urban (re) development process. \u003cem\u003eLand\u003c/em\u003e 9 (11):448.\u003c/p\u003e\n\u003cp\u003eAgaba, A. M., \u0026amp; Mpirirwe, C.(2023). Financial Innovations and Financial Inclusion\u003c/p\u003e\n\u003cp\u003eAmong Commercial Banks in Uganda. International Journal of Entrepreneurship and Business Management, 2(1), 43-58. https://doi.org/10.54099/ijebm.vi1.574\u003c/p\u003e\n\u003cp\u003eAgelyne, M., \u0026amp; Musau, S.M. (2021). 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Routledge. https://doi.org/10.4324/9781315186139\u003c/p\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Financial inclusion, Institutional theory, Rural development, Rural inclusion","lastPublishedDoi":"10.21203/rs.3.rs-8874479/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8874479/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eIn 2023, the FSDT released the key findings of the FinScope Tanzania 2023 Survey. The report compares changes in financial inclusion between 2017 and 2023, and concludes that, overall, the rural\u0026ndash;urban financial divide has decreased. However, it remains unclear why and how financial inclusion of rural dwellers would have improved, and why the environment within the country has become more favorable for financial inclusion. Therefore, this study analyses whether and how affirmative actions in Tanzania between 2017 and 2023 contributed to any type of financial inclusion improvement. The study takes changes in financial systems, financial agents, and financial literacy as its theoretical and analytical starting point. These three areas of change are then used as prompts to review government policy documents and associated development literature covering the period from 2017 to 2023, and to address aspects of financial inclusion in Tanzania. The review yielded that Tanzania developed new financial policies, Acts and regulations which has generated novel financial products and services. From these findings, we conclude that changes in financial systems, changes in financial agents, and changes in financial literacy have given Tanzania increased levels of financial inclusion, both in urban and rural areas. Further studies should thus focus on tapping the potential of the banking sector in Tanzania. The study recommends conducting additional research on how policies can influence rural dwellers into financial inclusion through banking. 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