Since its incorporation in mid-2004, FSDT has made huge strides in addressing systematic constraints in the development of rural Tanzania. There are several major donors including governments such as; the Canadian, the British, and Swedish governments that contribute toward achieving growth of the financial sector for poverty eradication. Combining efforts with the Financial sector deepening (FSD) Africa, FSDT is set to develop reliable innovative more digital financial products and services than ever before.
The main purpose is to boost the capacity and sustainability of the banking sector as an effort to improve SMEs. The biggest beneficiaries are the marginalized groups such as poor women and young people. The efforts are directed towards contributing to the economic growth by availing more, better and relevant solutions that are affordable to most of the poor Tanzanians.
The four instruments are; grants, loans, debts, guarantees for commercial loans and debt instruments. The products are divided into; digital savings groups, digital credit, sim-banking,, digital-enabled services and more debt services.
The agricultural and rural finance theme is one of the key areas of focus for the FSDT. It aims at facilitating advanced financial services targeting majority of Tanzanians. Since most of the rural population are unemployed, the services will help them attain self-employment and improve their living standards. The funds are agricultural oriented to encourage a huge number of citizens to explore the vast fallow lands.
The partners working with FSDT help to implement interventions in variety of advanced ways. Various technology inventions reduce the constraints and avail quality financial services and tools for modern farming.
FSDT focus on agriculture to improve the transactions that will not only boost use of the products but also yield more food for a healthier people. There are various positive results from empowerment of the rural Tanzanians beyond improving livelihoods. The country’s GDP rises making a great impact for the national economy. The products are also designed to deepen the online banking sector’s contribution to farmer welfare.
Rural finance helps boost transactions between rural citizens and entrepreneurs. They help raise the availability, usage, and experience of financial products. The FSDT interventions catalyze and boost the myriad of financial inclusion for rural people. Increased involvement of the rural citizens has boosted quality of the services especially with loan payment. This has led to the growth of the finance structure making it more reliable and on higher demand as a welfare booster.
SME Finance Tanzanian SMEs contribute at least 27% to the national GDP. More than 5 million people are employed in the sector. They have a problem with limited access to vital financial products, which are a big barrier to their development. This lack of access to financial services to the poor people has for a long time restricted registration and participation of the farmers.
FSDT has enabled the cooperation of SME financial works with the digital banking sector as well as stakeholders. Together, they help push innovative solutions to increase access and use of the financial products to as many SMEs. It also focuses on data and knowledge Exchange based on reliable policies and regulations.
Working with the banking sector, other non-bank financial institutions, and technology companies have helped to identify the most appropriate and newest ideas for the rural Tanzanians. The cooperation has made it possible for access and regular use of the products. The support helps deliver the most innovative services to create a positive and sustainable impact.
Reduction of the knowledge gap among rural farmers involved in SMEs using financial literacy has proved successful in achieving the objectives of the organization. The FSDT research team provides essential data and evidence for all stakeholders and most importantly; policy makers.
The most common activities include roundtables and forums, dialogues, regional conferences that promote unity of the SMEs for better production. The banking institutions, policy makers, private players, and technology companies use and share the data for better performance. Policy makers are able to use the data to create relevant policies and regulations to govern the SME sector
Insurance The FSDT insurance theme is one of the newest and trendiest of the focus areas. It addresses risk management and coping mechanisms in businesses. The primary role of Insurance in FSDT is to facilitate marketing for improved capacity and sustainability of the sector that will meet the needs of most of Tanzanians poor majority.
Latest survey shows that high rates of insurance that have doubled from 6% to 13%. The growth of the sector has been been found to be concentrated on the health covers hence the growth of the National Health Insurance Fund (NHIF) as well as the Community Health Funds (CHF). The Fincope report highlighted the product spread and low penetration for products such as educative and accident covers.
The report further reveals that the two major hindrances to growth are low demand among the rural population and poor understanding of how insurance works. They have negative perceptions and attitudes toward the covers due to semi-illiteracy. The second issue is insufficient distribution channels for insurance due to few skilled personnel to serve the vast rural regions. There is limited resources for product offerings vital for enabling the insurance environment.
The National Financial Inclusion Framework strives to improve penetration of the covers to the rural population with a target of 30% by the end of 3 years. Although it is an ambitious target, sensitization to change of attitude of the people via educative structures will help restore the problem.