E-Financing and the Quest for Financial Inclusion in Tanzania

John Samuel Kihamba


Electronic money transfer (e-finance) has gained support by the government of
Tanzania as an innovative payment system that provides financial opportunities to
both rural and urban populations. However, despite the fact that e-finance offers
many advantages to both public and private institutions and individual clients; and
that it has been promoting financial inclusion through the provision of affordable,
accessible and relevant financial products to individual as well as firms, yet it is not
without challenges. Therefore, this paper sets out to examine current trends in relation
to financial inclusion, and issues and challenges associated with electronic money
transfers in Tanzania. It focuses on the dynamics of financial inclusion and challenges
of electronic money transfers such as security risks, including cybercrimes (theft, spies,
hackers, and fraudsters). Also, it delves into how low level of understanding by some
clients and service providers is a challenge in e-finance since the two parties share
sensitive information through company computers as well as pin codes when
transacting electronic money. The paper recommends that it is imperative for the
government and other stakeholders to train both clients and service providers on the
safe use of e-finance and establish anti-cybercrime control mechanisms.

Keywords: information and communication technology; e-finance; e-service; financial
inclusion; mobile money.

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