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Bank of Tanzania: Restriction on issuance of electronic money licences

  • Market Insight 18 May 2021 18 May 2021
  • Africa

  • Finance

In this article, we highlight the restriction imposed by the Bank of Tanzania (BoT) on the issuance of electronic money licences through Circular No. LB.178/179/01/13 of 18 December 2020 (the Circular).


In 2007, the BoT introduced the Electronic Payment Systems Guidelines which provided directives on the regulation of non-bank financial institutions offering electronic payment schemes and money transfer services. 

Electronic mobile money transactions were first introduced in Tanzania in 2008 and have now morphed into a fully-fledged financial services segment in the country. The services were primarily introduced by mobile network operators (MNOs) to allow users to deposit, withdraw and transfer money. The services have since grown to include products which allow users to pay for goods and services, and access micro-financial services like credit and savings, all through their mobile devices.

As of September 2020, it was reported that Tanzania has over 30 million mobile money accounts across various operators. At the time, these accounted for approximately 300 million mobile money transactions valued at TZS 11.5 trillion each month.

Regulatory framework

Having noted that the existing regulatory framework did not address the licensing of mobile money service providers, the BoT made concerted efforts to develop a legal framework that would adequately support mobile money transactions and protect consumers. 

In 2015, the BoT introduced key pieces of legislation to further regulate mobile money and payment systems in Tanzania. These include the National Payment Systems Act, No. 4 of 2015, the Payment Systems (Licensing and Approval) Regulations of 2015 and the Payment Systems (Electronic Money) Regulations of 2015. Operators intending to offer electronic mobile money services were now required to obtain several licences including a payment systems licence, an electronic money licence and an application services licence issued by the Tanzania Communications Regulatory Authority (TCRA).

In addition to providing a clear regulatory framework, the legislation allowed for interoperability between different service providers. It is now possible for money to be transferred from bank accounts to mobile money wallets, and for banks to give small-scale loans via mobile platforms. 

Restriction on issuance of electronic money licenses

On 18 December 2020, BoT issued the Circular. The purpose of the Circular was to make it explicit that issuance of electronic money licences is restricted to licensed MNOs in Tanzania. This restriction was made with a view to strengthen effective oversight of electronic money operators and safeguard the stability of the financial sector. 

The Circular goes on to state that the restriction does not apply to banks and non-MNO entities that have already been issued with electronic money issuance licences as of 15 December 2020.


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