IMPACT OF DIGITALIZATION ON FINANCIAL INCLUSION IN TANZANIA

Abstract

The study assessed the impact of digitalization on financial inclusion in Tanzania. A case of mobile banking services in Arusha. Specifically examined the customers’ attitudes toward mobile banking in Tanzania, evaluated the costs associated with mobile banking in Tanzania, and identified the challenges faced by customers using mobile Banking in Tanzania. In Tanzania, financial inclusion through digitalization particularly the adoption of mobile banking still faces several obstacles. The study adopted a case study research design. Data were collected from 95 respondents at Arusha City Council using structured questionnaires and interviews. Specifically, the sample size comprised the mobile banking users from NMB and CRDB in Arusha City. The questionnaire results obtained were computed in the SPSS software to gather significant statistics to present the results of the study. Descriptive statistics were first generated to show the profile of the respondents and the results of objectives whereas content analysis was used to analyze qualitative data. The study found an average of 59.5% of respondents, believed that customers appreciate the convenience of mobile banking, mobile banking services users consider security concerns and customers are generally attracted to mobile banking features. Additionally, the results found that an average of 65.6% of respondents believed that digitalization is associated with costs. Moreover, the results found that an average of 65.3% of respondents believed that while digitalization is crucial for broadening financial inclusion, it's vital for all involved parties to acknowledge and tackle the associated challenges. The research recommended that to promote the use and acceptance of digitalization services, banks need to increase awareness of these services and make them more affordable to boost their usage. Furthermore, to achieve the greatest impact, it's important to confront the issues that come with digital transformation and to foster an environment that supports ease of access, security, and learning. This research advises that the Tanzanian Government and its various policy bodies should establish a policy framework that will enhance financial inclusion, as financial inclusion encourages financial intermediation and economic development.