NMB Bank Plc has teamed up with CARE International to make use of VSLAs to provide its services to groups of individuals found in any community who can now save their money and to access loans. The services will however be delivered through mobile phones.
Ineke Bussemaker, NMB’s Chief Executive Officer told The Guardian last Friday that a tailor made product christened Pamoja Account will allow thousands of rural people save and get loans through their groups thanks to CARE’s long-term initiative of empowering rural folks in East Africa’s remote areas.
Through the partnership, NMB will provide financial services to over 10,000 financially excluded groups with an estimated 25,000 individuals across the country
“We expect beneficiaries to exceed this target as our services will be available to other members of our host communities,” Bussemaker said.
She pointed out that if successful, the product will serve as an important precedent for financial service providers wishing to reach the rural market at a time when private, public and non-governmental stakeholders are taking notice and action to combat poverty through financial inclusion.
Bussemaker stressed that although individuals have accessed bank accounts with mobile phones before, this is the first system that allows groups the same type of secure mobile access.
CARE VSLAs members will be able to make cash deposits and withdrawals with NMB agents near their homes, or at any NMB branch countrywide.
Paul Daniels, Country Director of CARE International pointed out that access to and eligibility to open a bank account will no longer have barriers rural dwellers as they can now have access to such a facility at their community level.
Daniels pointed out that through Care VSLAs, one can open the bank account without visiting a physical branch thanks technology advancement.
“This is a pioneering private sector partnership that has potential to conveniently and affordably offer high quality retail financial services to millions of previously un-served people across Tanzania. There is enormous unmet demand for financial services in the country,” Daniels said.
The CARE International Country Director further noted that the goal is to drive savings-led financial inclusion for the under-served, savings-savvy groups and grant them formal banking experience.
Community-managed VSLAs are critical first steps to financial inclusion for many of the poorest households. VSLAs help vulnerable members develop financial skills and build assets. For many members, the merger of mobile payments with financial products specialised for groups will allow VSLAs to become an on-ramp for formal financial inclusion, Daniels argued.
Beneficiaries from Morogoro, Unguja and Pemba said in an interview that they are relieved to have NMB bank accounts because they can now use them to save and access loans from one of the country’s largest commercial banks.
Initially members of VSLAs made deposits in lockboxes as well as small loans to each other to start small businesses, pay school fees or meet household needs. Loans were repaid with interest which, in turn, was passed on to group members as earned interest on their deposits.
In recent years, mobile money platforms have quickly become trusted and popular tools in Tanzanian households thanks largely to the spread of mobile technology, an estimated 17 per cent of Tanzanians now have access to formal financial services.
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