For those of us in the West, I think that most people would agree that personal banking is something that we take for granted. No longer do we have to hide our money underneath the mattress (though with negative interest rates in some places this is can be a better option than a bank!). Carrying around big wads of cash whilst furtively looking around corners unsure of when someone will rob us on the way to make a big purchase is a thing of the past. Although post Brexit, the UK may be forced to revert to the barter economy.
But for many people in the world, banking is not yet a given but is still required to access many things in society. In Tanzania, mobile money systems are great and have taken the place of much of the formal banking system, such as sending money to someone across the country or storing money digitally. These systems even make paying for electricity, sending money to a friend, buying data packages are easier than they are in the west. However, there are still lots of things which mobile money has not solved. Opening a bank account is still very much a required activity.
So why doesn’t everyone have a bank account? Getting a bank account can be difficult as you need formal identification – not the easiest thing to obtain – and sometimes the account fees end up consuming a substantial portion of your deposits (or you even end up going backwards!). When the average income is <$25/month that happens quite often!
And then there are the administrative hurdles; which are not insignificant when most people in Kigoma have never been to secondary school. Seed Change recently helped all our employees open bank accounts. “Recently” and “all” being relative terms here. An intern of ours, Ilana Rohwedder, started this process when she was here in October last year, so not that “recently”. And one employee is still without a bank account as the bank lost one of the four letters he had to provide to them (not counting the bank form and various IDs and passport photos needed). Peter had to track down the relevant government official again to write him another letter (and pay a small administrative fee for this letter). Alas not quite “all” of our employees yet!
Banks – love ‘em or hate ‘em (who really loves them?) – we all kinda still need them. We are constantly hearing in the West about the need for banking reform, but the kind they have in mind would do little to ease the daily troubles of Kigoma’s bank customers…