Rework Energy: solar aid reworks electricity in the village – East Africa and Latin America

Rework Energy: rural energy foundation wants to raise awareness about the benefits of solar power in Africa.

Rework Energy: TaTEDO, the Tanzanian traditional energy development organization works to advance access to renewable energies in Tanzania.

TaTEDO

Rework Skills: Femina HIP is the civil society initiative behind the Fema magazine, the most popular magazine in Tanzania.

Femina HIP

Financial Sector Deepening Trust

The FSDT has been established to support Tanzania’s development of pro-poor financial markets, in response to the Government’s strategy for poverty reduction, known in Swahili as "MKUKUTA" and its National Microfinance Policy.

‘We measure progress towards this goal in two ways’ argues Ian Robinson, FSDT’s Technical Director, ‘a 7% reduction from 2006 to 2012 in the number of adults (aged 16+) who are totally excluded from access to financial services; and a doubling of the proportion of those who have bank accounts or otherwise access formal types of finance.’ In absolute terms, this means seeing some 3.2 million more people being able to access some form of financial service by 2012 and 2.5 million more people being formally banked. ‘These may be ambitious targets’ he adds, ‘but we believe they are achievable ones.’

The FSDT first became operational in June 2005 financed by a consortium of five development partners: CIDA, DANIDA, DFID, SIDA, and the Royal Netherlands Embassy; and in March 2008 was joined by the Government of Tanzania. In part, the Trust seeks to help smaller financial firms –especially microfinance institutions and small banks— develop to the point where they are sustainable, credible and creditworthy partners for commercial banks and other larger financial institutions. Without this, the flow of finance from where it is currently in surplus to those under- or totally un-served will remain limited. In addition, the Trust works to build capacity in financial and other service providers, as well as in the Bank of Tanzania and potentially other financial regulators. There remain substantial gaps in knowledge and information about the financial sector in Tanzania, which represents another area on which the FSDT is concentrating.

The single greatest challenge that the FSDT faces is the lack of enough well-qualified and experienced people, which underscores the importance of continuing efforts in the fields of education and health. In the financial sector, thee is a need to speed up policies to implement the rural financial services strategy, including support for re-engineering of SACCOS to create much larger units than exist today; a new financial cooperatives law; a balanced enabling environment for mobile phone banking; a massive capacity-building program for people who work in SACCOS and other microfinance providers; and a recognition that developing well-established informal groups probably represents the most effective and fastest means of providing financial access, especially in rural areas of the country.

For Ian, the challenges certainly fall at the door of the private sector as much as they do on the Government. He explains that banks are improving their outreach and not only by building more branches. In Tanzania, with its huge distances and low population densities, there are limits to the economics of setting up ever increasing numbers of brick and mortar branches. Banks will have to develop new delivery channels, including more use of mobile telephony, agency banking models, wholesale finance and other support for microfinance providers and the application of vehicles to bring bank branches to the people. Tanzania needs larger-scale, lower unit cost microfinance providers who have the drive, leadership and resources to serve tens of thousands -and preferably hundreds of thousands of people.

Public-private partnerships are seen as essential for improved financial access. Ian gives an example that illustrates this clearly: ‘one of the main barriers to access is the low level of financial literacy in this country. The FSDT is funding the development of a financial literacy strategy for Tanzania. Developing and then implementing the strategy will need whole-hearted commitment from many arms of Government, the full range of private sector financial service providers and NGOs working in the financial and educational sectors.’

‘Rework the World is an opportunity to share ideals, ideas and lessons from many countries’ Ian points out, ‘and perhaps most importantly’ he adds, ‘it’s an opportunity to think more creatively than we might otherwise do when dealing with the day-to-day pressures of the job. Allowing for this creative thinking to expand one’s horizons is an essential ingredient of leadership - in any walk of life.’