Finscope Tanzania Survey on Banking Industry 2006

8/9/2019 Finscope Tanzania Survey on Banking Industry 2006

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17 May 2007 W ork shop for Ban k Indust ry


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1. Registration of Participants

2. Introduction to FinScope, Annette Altvater, TD ofFSDT

3. Workshop: Findings and Discussion

Bob Currin FSDT consultants

Oswald Mashindano - ESRF

4. Moving forward, Annette Altvater, FinScopeCoordinator


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Annette AltvaterTechnical Director

FSDT


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First national consumer perceptionsurvey:

Individuals views of total money management

Formal and informal servicesAttitudes and behaviours

Credible, robust, scientific approach

Comprehensive market landscape rich

to poor for total market understandingProven multi-nation study within Africa


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Support for Government developmentinitiatives

Insights for commercial service providers(including MFPs), NGOs anddevelopment agencies to innovateservices and products

Allows planning and interventions focusedon specific market strata and segments


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Urban/rural and genderReporting domain

August September 2006Field dates

95%Confidence level

4,962Results weighted to projected population

Sample achieved

National Master Sample Plan nationalestimatesListing & selection of respondents done by NBS16+

Sampling

Qualitative researchQuantitative research

Methodology


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Share findings facilitate learning

Engage debate

Catalyse change and innovation

Support effective market development

Galvanise market structures


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Why FinScope ?Stratified market intervention

SAVINGS Social Grants

TRANSACTION BANKING Subsidies

CREDIT Tax Relief

HOUSING FINANCE

ENTERPRISE FINANCE Development assistance

INSURANCE

MARKET PROVISIONSTATE

PROVISION


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Collected interest areas and queries viaregistration forms and meetings

Analysis of data by FSDT, consultants

and ESRFCreation of a lens for quick referencing

Creation of appropriate context for the

informationSpecific market dynamics reviewed


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Population Profile:

Population characteristics

Geographical concentrations of people & issues

Gender issues

Perceptions

Infrastructure and amenities

Rural/Urban perspectives:

Semi-formal and informal categories explainedRural population needs & services to reach them

Demand and use of credit facilities in rural areas


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contd.

Product & ServicesIn-kind savings and in-kind loans

Co-operatives market SACCOs

Micro-finance

Savings, borrowing

Access:Barriers to access physical, non-physical & socio-economic

Access costs & perceptions

General Money MattersFinancial literacy and impact on uptake

Policy and legal impacts


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Poverty Lens

Access Strand and frontiers

Population profiles & perceptions


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Total adult population 16 years & older = 21million people

57% of adult population under 34 years of

ageThe urban/rural split of this population groupis 28% and 72%

There are more women than men in both

urban and rural areas


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28%

72%

48%

52%

6%

22%

29%

19%

11%13%

Urban Rural Male Female 16-17 Years 18-24 Years 25-34 Years 35-44 Years 45-54 Years 55+ Years


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36%

35%

28%

12%

11%

9%

8%

6%

5%

4%

4%

Sell own produce from my farm, food crops

Running your own business

Money from family/friends / spouse

Sell own produce from my farm, cash crop

Sell my livestock

Sell output from my cattle/livestock

Employed on other people's farm on a seasonal basis

Agricultural trading-buying and selling produce

Employed in the informal sector

Employed to do other people's domestic chores

Employed in the formal sector


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Total adult population


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25/132




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84%

84%

83%

82%

82%

81%

81%

80%

79%

How interest rates work/calculated

How to save more money

How much of a loan you can aff ord to apply for

Understand t he services/p roducts provided b y f inancial service

providers

How to o pen an account in a bank

Insuring/covering your lif e

Understanding banks, MFIs or Saccos charges/fees

How to manage your money eff ectively

Insuring/covering your assets


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95%

62%

43%

43%

25%

20%

14%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Primary School

Produce Market/ Food

Market

Police Station

Secondary School

Post Office

Formal Bank

NGO Office


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Education

Fuel for cooking

Drinking water

Toilet type

Material for house construction

EQLI


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Formally served Formal institutions

Semi-formal SACCOs and MFIs

Informal associations or groups

Financially excluded

Access Strand - Service providermarket composition


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Access to financial services bycategories

9% 2% 35% 54%1

Formal - 9% Semi-Formal - 2% Informal - 35% Excluded - 54%


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Access to financial services bysegmented categories

9% 35% 20% 34%

1%

2%

1%

1

Formal - BI - 9% Formal Other - 1% Semi-Formal (SACCO) - 2%Semi-Formal (MFI) - 1% Informal - 35% Excluded (Non monetary) - 20%Excluded (Totally Unserved) - 34%

Percentages rounded up

Access to financial ser ices b


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Access to financial services bycategories Urban/Rural

18%

5%

11%

24%

34%

33%

1%

0%

2%

1% 2%

0%

36%

32%Urban

Rural

Formal - BI Formal Other Semi-Formal - SACCO Semi-Formal - MFI

Informal Excluded - Non monetary Excluded - Totally Unserved

Percentages are rounded up

Access to financial services by


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Access to financial services bycategories - Gender

12% 31%

38%

21%

19%

32%

35%6%

0%

1%

1%

2%

1%

1%

Male

Female

Formal - BI Formal Other Semi-Formal (SACCO) Semi-Formal (MFI)

Informal Excluded (Non monetary) Excluded (Totally Unserved)

Percentages rounded up


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28%

51%

17%

2%

0%

10%

20%

30%

40%

50%

60%

Make Decisions Alone In Consultation-Partner In Consultation-Other

Family

Do Not Make These

Decisions


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29%

53%

16%

2%

28%

50%

18%

3%

0%

10%

20%

30%

40%

50%

60%


Family

Do Not Make These

Decisions

Male Female


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30%

49%

18%

2%

28%

52%

16%

2%

0%

10%

20%

30%

40%

50%

60%


Family

Do Not Make These

Decisions

Urban Rural


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7%

12%

8%

2%

3%

2%

34%

39%

33%

57%

45%

58%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Make Decisions Alone

In Consultation-Partner

In Consultation-Other

Family

Formally Included Semi Formal Informally Included Excluded


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38%

23%

18%

6%

4%

4%

3%

2%

1%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Agriculture related

Running own business

Money from Friends/Family

Employed in Informal sector

Sub-Letting land/house/Rooms

Do not receive income

Employed in Formal sector

Domestic work

Pension


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

No Formal Schooling

Pre-primary

Primary

Post Primary Training

Secondary

Post Secondary Training

University

FI - Formally Included SI - Semi Formal II - Informally Included E - Excluded


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by financial service provider:BanksSaccos

MFIs

Percentage of Tanzanians obtainingsaving or loan from: Bank SACCO or


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saving or loan from: Bank, SACCO orMFI

53%

30%

17%

0%

10%

20%

30%

40%

50%

60%

Saving and Loan Bank Saving and Loan SACCO Saving and Loan MFI


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People with a bank account who either save orborrow from a SACCO or MFI

22%

13%15%

7%

0%

5%

10%

15%

20%

25%

SACCO MFI

Saving Loan


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Tanzanians with a bank account who are servedby informal service providers, MFIs and SACCOs

48%

26%

15%

47%

15% 17%

49%

42%

12%

0%

10%

20%

30%

40%

50%

60%

Informal financial services

%

SACCO borrowers and

savers %

MFI borrowers and savers

%

Total Urban Rural

Urban - rural split of clients of different

categories of financial service providers


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31% 69%

61% 39%

55% 45%

30% 71%

0% 20% 40% 60% 80% 100%

SACCO borrowers and savers

Banked

MFI savers and borrowers

Informal financial services

categories of financial service providers

Urban Rural


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1,609,378664,976

18,859,849

Currently Banked Previously Banked Never Banked


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5%

13%

30%

27%

13%

12%

2%

15%

28%

12%

17%

26%

6%

23%

29%

19%

11%

13%

0% 5% 10% 15% 20% 25% 30% 35%

16-17 Years

18-24 Years

25-34 Years

35-44 Years

45-54 Years

55+ Years



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1%

2%

23%

6%

41%

19%

7%

4%

4%

54%

2%

25%

8%

1%

15%

14%

57%

2%

8%

0%

0%

0% 10% 20% 30% 40% 50% 60%

No Formal Schooling

Pre-primary

Primary


Secondary


University



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61%

45%

25%

39%

55%

75%

0%

10%

20%

30%

40%

50%

60%

70%

80%


Urban Rural


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27%

7%

4%

10%

73%

10%

21%

3%

0%

28%

3%

3%

3%

7%

4%

6%

3%

1%

45%

90%

93%

87%

20%

86%

73%

94%

99%

0% 20% 40% 60% 80% 100% 120%

Pension

Money from Friends/Family

Agriculture related

Employed in Informal sector

Employed in Formal sector

Running own business

Sub-Letting land/house/Rooms

Domestic work

Do not receive income



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Income (groups) of people with a bank account

TSH 20,001 to 50,000,

13%

TSHS 200 001+ P/M, 10%

TSH 1 to 5,000, 1%TSH 5001 to 20,000, 6%

TSH 50,001 to 100,000,27%

TSH 100,001 to 200 000

P/M, 19%


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2%

1%

2%

1%

7%

0%0%

1%

2%

3%

4%

5%

6%

7%

8%

ATM Card Debit Card PostbankAccount

Current Account SavingsAccount

Fixed Deposit


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52%

17%

13%

9%

5% 4%

0%

10%

20%

30%

40%

50%

60%

SavingsAccount

ATM Card PostbankAccount

Debit Card CurrentAccount

Fixed Deposit


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Perceptions on Banking Operations


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Shop around for best interest rates

Can easily live without formal banking institutions

Taking loans should be avoided

You trust your own experience/know ledge rather than

the advice of others

If you save and invest regularly, eventually the small

amounts w ill mount up

Would rather deal with people you know than with FI

Would rather deal face to face with a person than with an

electronic device

Agree Disagree DK


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Young people know more

Most services off ered re also available from Non-bank FI

Would like to start your ow n business but can't get a loan

Don't trust informal associations

Prepared to learn how to use new technology eg ATM

Upon receiving an account statement, you check the details

Banks f orce you to use the ATM

Agree Disagree DK

Financial Products Used


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Financial Products Used


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19%

17%

13%

4%

2% 2%

1% 1% 1%0%2%

4%

6%

8%

10%

12%

14%

16%

18%20%

CRDB

Ban

k

Tanz

ania

Pos

talB

ank

NBC

Limite

d

Akib

aCo

mm

ercial

Ban

k

Stan

bicBa

nk

ThePeo

ple'

sBa

nkOfZ

anziba

r

Barc

lays

Ban

k

DarEs

Sal

aam

Com

mun

ityBan

k

Exim

Ban

k


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based on education


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based on education


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The concept lines ofsaving/investing and insuring are

blurred


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Tanzanians save to make provisions or insurethemselves in case of certain events

37%

28%

14%

11%

10%

8%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Meet HH Needs-Little/No Money

Emergency (Burial Medical

For Later In Life/Old Age

To Leave Something For Child

Education Of Self, Child and others

Social Reasons (Wedding)


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Forms of savings in-kind of people who save


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41%

27%

23%

22%

18%

16%

13%

9%

4%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Livestock - Eg.Goats And Cows

Agricultural Produce

Food

Entertainment Items-Eg. Radio

Means Of Transport -Eg. Bicycle

Household Items - Eg. Salt, Soap

Agricultural Inputs - Eg. Seeds

Clothing

RTA

Benefits for keeping savings in-kind of


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Benefits for keeping savings in-kind of

Tanzanians who save

31%

21%

20%

19%

18%

17%14%

13%

7%

5%

4%

0% 5% 10% 15% 20% 25% 30% 35%

To Keep Item&Sell At Later Date

Better Returns Than Investment

Can Exchange For Goods/Servicese

For News/Entertainment Purposes

Easier To Meet Your Obligation

SecurityFor Transportation Purposes

Makes It Easier To Do Business

Able To Pay For The Goods

Adds To Comfort Of Living

RTA

Can Avoid Paying Tax


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Access to financial services of people who save in-kind

9.6% 2.6% 47.7% 40.1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1

FI - Formally Included SI - Semi Formal II - Informally Included E - Excluded

Demographics of people who save to insure

themselves for certain events


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27%

73%

48%52%

5%

22%

32%

19%

11% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Urban Rural Male Female 16-17

Years

18-24

Years

25-34

Years

35-44

Years

45-54

Years

55+

Years

Level of education of Tanzanians between 25-34


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years who save to insure themselves for certain

events

60%

12%

12%

8%

3%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70%

Primary

No Formal Schooling

Secondary

Pre-primary



RTA

Reasons for never having saved or invested


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22%

20%

15%

6%

5%

4%

4%

3%

3%

2%

2%

2%

2%

2%

2%

1.60%

0% 5% 10% 15% 20% 25%

Having Money To Save

Don't Have Start Up Money

Poor Or Low Returns

Needing Lump Sum To Start With

Live For Today

Facility Not Nearby

Don't Understand How Serv. Work

Unaware Of Products

Not Available In This Area

Can't Qualify

Cost Of Service/Getting There

Time Consuming To Participate

Too Young To Contract

Difficult To Use Or Access

You Need A Referee

No Relevant Documentation


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38%

33%

23%

9%

6%

6%

4%

4%

3%

Loan From Family/Friend

Credit From A Kiosk

Loans In Kind-Eg. Livestock

Loan From A SACCO

Loan From ASCA

Loan From Microfinance Instit.

Business Loan

Personal Loan From A Bank

Loan From Informal Lender

Sources of borrowing split by

urban/rural


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35%

13%

11%

13%

7%8%

39%

27%

3% 3% 2%

8%

Loan FromFamily/Friend

Loans In Kind-Eg.Livestock

Loan From A SACCO Loan FromMicrofinance Instit.

Business Loan Personal Loan From ABank

Urban Rural


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Reason for borrowing money


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12%

11%

10%

10%

9%

6%

4%

4%

4%

3%

3%

3%

2%

2%

0% 2% 4% 6% 8% 10% 12% 14%

Acquiring Household Goods %

Educate-Self, child, s ibling, other

Setting Up A Business %

Meeting Day To Day Expenses %

Building Or Improving A House %

Farming Activities %

Emergency %

Purchase Of Livestock %

Expanding Business %

Increase Your Bank Balance %

Purchasing Means Of Transport %

Pay Off Debts %

Social Reasons %

Purchase Of Land %

Reason for never having applied for a loan


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32%

31%

29%

22%

16%

15%

12%

9%

8%

4%

4%

3%

0% 5% 10% 15% 20% 25% 30% 35%

Don't Have Enough Money

Never Needed It

Fear Not Enough Money To Repay

Don't Know Where To Get Loan

They Charge Too Much

No Place Nearby To Go Get Loan

Don't Have Any Collateral

Don't Believe Paying Interest

Don't Have A Guarantor/Referee

Don't Have Identification

Too Young To Qualify

Spouse/Partner Won't Allow It

Reason for never having applied for a loan


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20%

80%

16%

84%

30%

70%

Urban Rural

Saving in Kind Loans in Kind Remittances in Kind


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24%

16%14% 13%

10%9%

8%

5%

Livestock -

Eg.Goats And

Cows

Agricultural

Produce

Food Entertainment

Items-Eg.

Radio

Means Of

Transport -Eg.

Bicycle

Household

Items - Eg. Salt

Agricultural

Inputs - Eg.

Seeds

Clothing


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6%

11%

19%

2%4%

11%

using an financial institution using a courier company Through a personal contact

Urban Rural


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Area based samplingAllows modelling and mapping of data

Overlay supply-side data with demanddata

Determine market gaps

Better utilisation of resources


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All


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Summary on Challenges of Financial MarketsByOswald Mashindano

Economic & Social Research Foundation (ESRF)

Impediments to FinancialMarkets


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Low levels of financial literacy

Poverty as a barrier

Rural dwellers are generally poorer than their

urban counterparts

Poorly developed infrastructure

Roads, communications, electricity,

transportation etc

A combination of these factors leads to


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Lower participation and poor financial accessibility

Increased transaction costs per monetary unit of financialintermediation;

Increased risks for any financial institution attempting to serverural clients;

Formal financial institutions largely avoiding serving rural areas;

Financial services available are provided by informal agents or

mechanisms which offer a narrow range of financial services tolimited customers.


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1. Summing up2. Dissemination strategy

Annette AltvaterFinScope Coordinator

FSDT


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??


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Key findings:

initial analysis presented at the FinScope Tanzania launch -April 2007

Currently: research institutions and consultants mine thedataset, present more analyses and workshop the applicationof these analyses

Materials are published on the FSDT dgroup website launchbrochure, analyses and presentations.

Intermediate disseminationbetween April and June 2007


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In-depth analysis and workshops.The FSDT will:

host workshops for some market segments

facilitate local market research capacity

develop the means, (possibly includingsubsidies), to assist users to buy or useanalytical services to apply the findings


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Commercial Banksand CommunityBanks, TIOB

Client profiles and preferences,useful information for financialsector deepening

Banking industry17 May 2007

Insurance companiesand Insuranceauthorities


Insurance industry16 May 2007

Government agenciesPolicy and regulatory issuesGovernment4 May 2007

Donor agenciesSupport and promotion of propoor financial services

Donors anddevelopment partners

3 May 2007

InstitutionsinvitedSubject of analysisMarket segmentDate

Institutions invitedSubject of analysisMarket segmentDate


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Mobile telephoneservice providers andregulators

Usage of mobile telephoneservices and the potential ofmobile payment systems

Mobile telephoneindustry

28 June 2007

Market researchservice providers

FinScope data and the potential ofFinScope market researchservices

Research27 June 2007

MicroFinanceInstitutions


Microfinance7 June 2007

Savings- and CreditCo-operative Societies


Cooperativemovement

6 June 2007

from June until the next FinScope survey in2008


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Demand-driven, tailored market research:

Market research institutions to offer services to users

Feedback from users of information for the nextFinScope survey

The next FinScope survey may reflect any marketinnovation implemented in the meantime


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Register for the workshops with the FSDT

Submit questions or issues for mining to:

1. the FSDT dgroup website(http://dgroups.org/groups/FSDT-Tanzania) or

2. Juliana, FSDT Office Manager, ([email protected])or 022 212 9060-63


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Thank you for participating today!


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Finscope Tanzania Survey on Banking Industry 2006

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