The impact of mobile fintech on financial inclusion in Tanzania (2020 – 2024): A literature review

Abstract

Despite the growing body of literature on the impact of mobile fintech services on promoting financial inclusion, the trends in the adoption of mobile money services, as well as the number and value of transactions that enable the access of a variety of financial services such as savings, transfers, payments, credit, insurance and investment opportunities, remained less understood and inadequately documented. This study aimed to review the impact of mobile fintech services on financial inclusion in Tanzania from 2020 to 2024. The study was guided by two key theories: the Technology Acceptance Model (TAM) and the Financial Inclusion Theory. This study employed both quantitative and qualitative research methods approaches, based on a comprehensive literature review. Data were drawn from a range of published articles in peer-reviewed journals accessed through several academic databases as well as grey literature from websites of key organisations, including the Tanzania Communications Regulatory Authority (TCRA), the Bank of Tanzania (BOT) and fintech service providers. The findings indicated that the mobile fintech service in Tanzania is dominated by a few service providers such as M-Pesa, Mixx by Yas and Airtel Money. The mobile money accounts in Tanzania have increased from 32,268,630 in 2020 to 63,207,569 in 2024, recording an annual increase of 19.85% in 2020, 8.55% in 2021, 13.84% in 2022, 22.55% in 2023 and 16.35% in 2024. Further, Tanzania has experienced a consistent improvement in its financial inclusion index from 0.45 in 2020 to 0.81 in 2024. The Pearson's correlation coefficient has shown that mobile money accounts have a positive and statistically significant correlation with the financial inclusion index (r = 0.930, p = 0.011). Similarly, the number of transactions had a positive and statistically significant correlation with the financial inclusion index (r = 0.917, p = 0.014). The value of transactions also showed a positive and statistically significant correlation with the financial inclusion index (r = 0.858, p = 0.032). Furthermore, mobile money accounts had a very strong positive correlation with the number of transactions (r = 0.996) and with the value of transactions (r = 0.973), indicating that as mobile money adoption increases, so do the number of transactions and the value of these transactions. This study concludes that the adoption of mobile fintech services has a strong positive correlation with financial inclusion in Tanzania from 2020 to 2024. This study recommends that policy and decision-makers in Tanzania should focus on creating a more favourable environment that fosters competition among mobile money service providers, ensuring that fintech services remain affordable, efficient, and accessible to all population segments, particularly low-income and rural communities.