Role of Interoperable Digital Financial Services in Promoting Financial Inclusion in Tanzania

Abstract

This study explores role of interoperable digital financial services (DFS) in advancing financial inclusion in Tanzania. Despite the rapid growth of mobile money platforms, limited interoperability across service providers continues to restrict access, efficiency, and user experience, particularly among underserved populations. Guided by three objectives: to examine DFS adoption and usage patterns, assess the level of interoperability, and analyze its impact on financial access; the study employed a mixed-methods design combining surveys and key informant interviews to 420 respondents. The data were analysed using descriptive statistics and regression analysis. The findings reveal that interoperability significantly enhances transaction convenience, affordability, and trust. The results underscore that DFS interoperability is not merely a technological innovation but a policy instrument that expands access to affordable financial services, reduces transaction costs, and empowers low-income populations. The study concludes that strengthening interoperable digital financial services are critical to realizing inclusive financial systems in Tanzania.