Last month I had the privilege of participating in the first AFI Peer Advisory engagement as one element of AFI’s broader support to Bank of Tanzania (BOT) with the implementation of Tanzania’s National Financial Inclusion Framework.
The origin of the assignment was a request by BOT to receive assistance with developing a comprehensive supervision framework for agent banking in Tanzania. While usually such work is conducted by bilateral and/or multilateral development institutions or through independent consulting firms, AFI proposed to match BOT up with another of its members, the Banco Central do Brasil (BCB), to get the job done.
With its unparalleled experience on the subject of banking agents, BCB was the ideal peer adviser for the job. However the learning between the two institutions does not only go one way. About one year ago BOT was invited to share its experience with overseeing mobile financial services at the 5th Banco Central do Brasil (BCB) Financial Inclusion Forum in Fortaleza.
Related: The Lion and the Toucan—BOT’s experience in MFS valuable to peers in Brazil
What makes this pairing so interesting and potentially enriching is that the two countries are diametrically opposed when it comes to banking and non-bank e-money agents: Brazil is one of the (if not the) most advanced countries in terms of banking agents. While it currently roughly counts a staggering 360,000 agents that serve its population on behalf of their banks, non-bank e-money in Brazil is in its infancy. Tanzania, however, has seen the mushrooming of approximately 240,000 e-money agents in the last six years, but banking agents have not yet taken off.
Agent banking business in Tanzania started in early July 2013, after the Guidelines on Agent Banking were developed in February 2013 in response to the initiatives on financial inclusion by the Government of Tanzania and mounting pressure from the banking industry. As of December 2014, nine banks had been approved to appoint agents, and so far five have started to roll them out. The total number of agents is around 1,300. During the week we spent in Dar es Salaam we found several areas that the AFI Peer Advisory assignment will have to tackle:
In the course of the year BCB and BOT will cooperate to improve the currently existing regulatory and supervisory framework in Tanzania. I would not be surprised if in the course of the cooperation BCB will also be able to benefit from BOT’s experience with non-bank e-money.
ABOUT THE AUTHOR
Klaus Prochaska is a Senior Policy Analyst and Knowledge Manager at the Alliance for Financial Inclusion.
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