Usage of Information and Communication Technology for Access to Financial Services in Tanzania

Abstract

Access to financial services is limited to the large population worldwide. This study mainly intended to examine relationship of ICT adoption in microfinance institution on access to financial services, particularly on availability, convenience and affordability in Tanzania. A cross sectional study design was conducted in two regions (Kilimanjaro and Dar es Salaam) for 11 selected Microfinance institutions. Exploratory factor analysis (EFA) was employed to reduce the variables to the manageable size while retaining the original information as possible. The study used structural equation modelling (SEM) with help of Analysis of Moment Structures (AMOS) version 21. SEM used to determine multiple relationships between ICT adoption and access of financial services variables simultaneously. The analysis included 303 customers from 77 microfinance institutions from Kilimanjaro and Dar es Salaam. Five factors were grouped from 29 variables. Only one path leading from ICT adoption to availability of financial services was found statistically significant. This implies ICT plays a key role of delivering financial services to clients via electronic delivery channels. Hence services become available to everybody regardless of location and time.