Tanzanians transferred more cash more via their mobile phones than the entire banking system in 2013, with official data showing that mobile transactions reached almost Sh29 trillion – equivalent to 54 per cent of the country’s Gross Domestic Product.

Transactions through mobile phones totalled Sh28.852 trillion last year to consolidate the position of mobile transfer as an increasingly important player in the country’s financial system, Bank of Tanzania (BoT) figures show.

That was a 65 per cent growth from transactions worth Sh17.4 trillion conducted in 2012, according to the BoT’s Directorate of Banking Supervision Annual Report, 2013.

To put this into perspective, the value of mobile transactions in 2013 was equivalent to 54 per cent of the total market value of all goods and services produced in Tanzania last year’s GDP of Sh53 trillion.

The money, transacted via Vodacom’s M-Pesa, MIC Tanzania’s Tigo Pesa, as well as Airtel Money and EzyPesa for Airtel and Zantel, respectively, was 45.7 per cent more than the current national budget of Sh19.8 trillion.

The increase, according to the report, stems largely from a rise in the number of registered users of mobile payment services.

“The number of registered users of mobile payment services increased by 18.46 per cent from 26,871,176 recorded in 2012 to 31,830,289 in December 2013,” says the report.

The BoT figures show that mobile transfer is fast becoming the most widely used medium of cash transactions, overtaking traditional systems such as automated teller machines (ATMs) and points of sale (PoS).

Cash, transacted via PoS – a computerized network operated by a main computer and linked to several checkout terminals – reached Sh1.149 trillion in 2009.

It has, however, been dropping to reach Sh198 billion in 2012 before picking up to Sh347 billion in 2013. Similarly, some Sh9.642 trillion was transacted via ATMs in 2011 but the figures dropped to Sh7.637 billion in 2013.

 To put these figures into a simple perspective, the total amount of cash transacted through mobile phone financial service in the country was four times what banking customers conducted via ATMs last year.

The new figures put Tanzania closer to Kenya, where mobile cash transactions reached $20 billion (about Sh33.3 trillion) last year, or 31 per cent of that country’s GDP in 2013.

In Uganda, some 14 million people transacted a total of Ush18.6 trillion (about Sh11.7 trillion) through trading, sending and receiving money in 2013.

According to BoT governor Benno Ndulu, plans are now underway to expand the use of mobile phone money platform so it can cover other mainstream banking services.

So far, he says in his message published in the report, the mobile financial services operated by banking institutions and mobile network operators have enabled 90 per cent of the adult population in Tanzania to have access to mobile money accounts with 43 per cent (9.8 million) adults being active users.

“However, most of these are still unbanked.

Although mobile financial service has its limitations as it is still widely used for payment based services only, initiatives are being deployed to expand its use as a platform to deliver other financial products from mainstream banking services,” Prof Ndulu says.

Analysts say the integration of mobile phone money transactions into the country’s financial system is something worth celebrating for it means less headache for both financial institutions and their clients.

“This is something we must be proud of….it simply means that gone are the days when someone who lives in Kigoma was required to wait for 21 days before his/her cheque – deposited in Dar es Salaam – matures,” said financial analyst Lawrence Mafuru.

To commercial banks, he said, the integration with mobile phone platforms gives them a chance to make more profits while serving a ballooned population.

According to Mr Mafuru – who currently works in the President’s Delivery Bureau under the Big Results Now (BRN) initiative as the Director of Resource Mobilisation and Economic Sectors Division – the integration means commercial banks now do not need to save on operation costs.

“Basically, it takes between $400,000 and $500,000 to open one branch….you also need to maintain it including paying members of staff, electricity, water and other costs….in short, you need at least four years to recoup that money but with mobile phones, you can easily transact even without all these costs,” he told The Citizen over the phone yesterday.

He played down assumptions that the dominance of the mobile phone money transfer platform will lead to an extinct of traditional means, saying it all depends on the type of transaction to be made.

“If for example you want to buy a book, you will need internet banking to pay Amazon. This way, all platforms will continue to be there depending on new innovations,” he said.