Banking - Tanzania

Tanzania

The Banking market in Tanzania is expected to see a significant increase in Net Interest Income, reaching US$4,789.00m in 2024.
Traditional Banks are projected to dominate this market segment, with a projected market volume of US$4,782.00m in the same year.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate (CAGR 2024-2029) of 5.37%, leading to a market volume of US$6,221.00m by 2029.
When compared globally, China is anticipated to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
Tanzania's banking sector is experiencing a shift towards mobile banking, with an increasing number of people using digital platforms for financial transactions.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Tanzania has been experiencing significant developments and trends in recent years.

Customer preferences: Customers in Tanzania are increasingly demanding more digital banking services, such as mobile banking and online transactions, due to the convenience and accessibility they offer. This shift in preferences has led banks to invest more in their digital infrastructure to meet the growing demand for these services.

Trends in the market: One notable trend in the Tanzanian banking market is the increasing competition among banks to offer innovative products and services to attract and retain customers. This has resulted in banks introducing new features such as mobile wallets, contactless payment options, and personalized banking solutions to stay competitive in the market.

Local special circumstances: Tanzania's banking market is also influenced by local factors such as the government's efforts to promote financial inclusion and stability in the sector. Regulatory changes and initiatives aimed at increasing access to banking services in rural and underserved areas have had a significant impact on the market dynamics.

Underlying macroeconomic factors: The growth of the Tanzanian banking market can be attributed to various macroeconomic factors, including the country's stable economic growth, rising disposable incomes, and increasing urbanization. These factors have contributed to a growing middle class with higher purchasing power, leading to increased demand for banking products and services.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.