Abstract:
A large percentage of people living in the developing countries, Tanzania in particular face some constraints in accessing financial services. These are in the form of distance to the financial service and the minimum requirements required by these financial institutions. The breakthrough of the mobile money has been able to reach many people. Thus, this study was carried out to assess the role of mobile money to the increase of financial inclusion in Tanzania. The study was guided by the specifics of analyzing the status of mobile money usage and challenges that face the user of mobile money.
A sample of 92 respondents was used for data collection in the city of Dar es Salaam. Convenient sampling procedure was used to collect the data from the respondents. The logit model was used to perform analysis for the study with the help of the statistical program STATA.
The findings indicate that income level, mobile money and the bank are very significant factors which influence the increase in financial inclusion in Dar es Salaam. The findings revealed a high level of mobile money usage in Tanzania. There are however some restricting factors like theft, high charges for withdraw, limit to withdraw and deposit and liquidity with the agents.
Conclusively, the mobile money has a big role in increasing financial inclusion in Dar es Salaam. It is recommended that the regulators of these services should review the limits in holding funds in the account and transaction amount to enable performance of big transactions.
