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THE World Bank today presented at a Bank of Tanzania Dissemination Workshop the findings of the Diagnostic Review for Increasing Consumer Awareness and Protection and Financial Services in Tanzania conducted in January 2013. The study is in line with the revised standard framework of Consumer Protection Financial Literacy (CPFL) published in 2012, based on in-depth country-level reviews of good practices of consumer protection and financial literacy.
The CPFL review considered consumer protection issues in the banking, microfinance and pensions sectors with a particular focus on issues related to institutional structures, the legal and regulatory framework, transparency and disclosure, business practices and dispute resolution. A review was also undertaken of initiatives related to financial literacy.
The World Bank is supporting countries all around the world in their efforts to strengthen consumer protection and financial literacy frameworks. The Good Practices are a compilation of the most frequently used practices that have been successfully carried out in the field. They represent a summary of useful approaches for the improvement of conduct of financial institutions when dealing with retail customers and aim to provide a reference for policymakers in designing their financial consumer awareness and protection.
“We are pleased by the steps and activities that have been undertaken so far in Tanzania aiming a strengthening consumer protection and financial literacy levels of the Tanzanian population” says Andrea Dall’Olio, the World Bank Sector Leader covering Finance and Private Sector Development for Tanzania, Uganda and Burundi.
“The Team has been very impressed by the drive, determination and enthusiasm of the key stakeholders working on these issues and we hope to continue this very fruitful partnership with Bank of Tanzania in the implementation of key recommendations. Going forward, the World Bank look forward to working with key stakeholders on important issues associated with the CPFL framework in Tanzania.”
Notwithstanding these positive developments the report highlights further areas of reform in order to address institutional arrangements and the limited requirements concerning disclosure, dispute resolution and fair business practices. The report also notes the need to accelerate implementation of Tanzania’s financial education framework.
In the context of Tanzania the following challenges seem to be particularly relevant when designing and strengthening the existing CPFL framework: (i) the increased usage of delivery channels, in particular financial services delivered via mobile phones, have filled a critical need for consumers in Tanzania but raised important issues of consumer protection; (ii) the large share of the population is living in rural areas and with prevailing low levels of financial literacy which limits the use of formal financial services and increases the risk of consumer rights abuses.