Financial inclusion refers to access for all individuals and firms to a wide range of formal financial services. Why is it important ? Access to formal financial services can help people to accumulate assets safely, access finance for investment when opportunities arise, deal with risks they face in their everyday lives and in business, reduce the transaction costs of paying and receiving money, and help smooth out uneven income and expenditure.

The chronically poor are the least likely to be able to access formal financial services, though with the spread of digital technology, access to financial services is now widening at greatly accelerating speed. Major opportunities exist, particularly through mobile phone technology and mobile money systems, to dramatically improve financial inclusion in even the poorest countries. Despite the excitement generated by digital channels for accessing services, caution is also necessary.

This brief examines the current extent of financial inclusion in Tanzania – focusing particularly on the chronically poor – and also specifically on access to savings and insurance services. This is because of the increasing body of evidence about the role which the two services can play in helping households to escape poverty and, by implication, to manage shocks and build their resilience

Please download the Policy Brief Financial inclusion and chronic poverty: access to savings and insurance services in Tanzania

Authors: Lucy Scott and William Smith