MISCONCEPTIONS about financial services and the rise in non-performing loans, exacerbated by dishonest practices with a section of bank employees, hinder efforts at greater financial inclusion in the country.

Dr Mwigulu Nchemba, the Finance minister, made this observation at the opening session of the financial sector forum in Dar es Salaam yesterday, emphasizing the need for collective action to overcome barriers preventing broader access to financial services.

These drawbacks harm the financial sector and must be addressed to safeguard its stability, he said, appealing for greater collaboration among stakeholders to address ongoing challenges to achieving financial inclusion.

While underlining the progress made in expanding financial inclusion across the country, he pointed at major hurdles to inclusion particularly in rural areas, even with the rapid pace of technological advancements in financial service delivery. 

He said that limited public understanding of financial services is an acute challenge, while lamenting widespread 

Acknowledging strides made in financial inclusion, he said that challenges being faced require joint solutions, pointing at practices in the financial sector, such as loan insurance. Some banks exert pressure on customers to repay loans within an unrealistically short period, he stated. 

“This has led to the loss of collateral, damaging trust in financial institutions,” he said, explaining that such practices have driven many individuals to seek out unregistered lenders, “further eroding confidence in formal financial systems.”

“This behaviour undermines the trust people have in banks and we must work together to address this issue,” he stated, reaffirming the government’s commitment to taking strong action against unregistered financial service providers/

They often operate outside regulatory oversight and exploit vulnerable borrowers, he said, explaining that this effort is part of a broader strategy to ensure that financial services are more accessible, safe and reliable for all Tanzanians.

On a more positive note, he cited the growing presence of commercial loan insurers in the market, now numbering 45, helping to mitigate some risks in the lending sector. 

The growth is an indication that the financial services industry is evolving and adapting to the demands of the modern economy he stated.

Dr Natu Mwamba, the permanent secretary, had earlier said that the forum serves as a vital platform for sharing knowledge and best practices, developing collective solutions to financial sector challenges. 

“This forum allows us to engage in open discussions, share advancements in the financial sector and identify the most effective ways to implement new policies,” she said.

Collaboration among all stakeholders – including financial institutions, regulators, and policymakers – is essential for driving meaningful reforms in the sector, she stated.

Prof Adolf Mkenda, the Education, Science and Technology minister, expressed the need for financial sector stakeholders to contribute expertise to developing the new curriculum for business subjects in schools. 

Business education will be made mandatory in the revised curriculum, aimed at preparing young Tanzanians to become entrepreneurs and better equipped for the business world, he specified.

Stressing the nurturing of future entrepreneurs from an early stage, he said the syllabus needs to be aligned with industry needs and prepare students to succeed in the evolving financial landscape.

The forum brought together key figures from the banking, insurance and fintech sub-sectors, focusing on collaboration and innovation to meet the growing financial needs of the population.

As the forum progresses, it is expected that actionable strategies will be developed to tackle existing challenges, further advancing Tanzania’s efforts to achieve comprehensive financial inclusion, organisers said.