On 29 October, AFI members from Africa, Latin America, and Eastern Europe met virtually to discuss how competition can advance financial inclusion.

The meeting centered on a study by Innovations for Poverty Action (IPA) of Tanzania’s competition and regulatory environment. Members examined how market structure, regulation, and competition dynamics shape the cost, quality, and accessibility of digital financial services (DFS).

“We looked at how DFS pricing affects competing policy objectives […] and how all stakeholders in Tanzania can work together to balance those priorities,” said IPA’s Paul Adams.

The findings informed the Bank of Tanzania’s (BoT) policy response. “The study made clear that operators were charging consumers a high percentage,” said Mutashobya Mushumbusi, BoT’s Head of Retail Payments. “That’s why we capped transaction fees for both mobile money and banks.”

The study identified the factors driving up DFS costs in Tanzania and recommended ways to reduce them, supporting a more competitive and inclusive ecosystem.

Mobile money’s reach makes the issue especially pressing. “72% of Tanzania’s financially included population use mobile money,” Mushumbusi added. “Affordability and competition in this sector are essential if we want to achieve quality financial inclusion.”

“Barriers to entry, market concentration and unequal access to essential infrastructure can limit innovation, consumer choice, and affordability,” said AFI’s Head of Policy Management, Ali Ghiyazuddin Mohammad.  “As regulators, we must understand these market dynamics and consider how regulatory frameworks can promote healthy competition, while also safeguarding stability and consumer protection.”

Key takeaways from the IPA study included the role of shared infrastructure in levelling the playing field, and the importance of monitoring prices, market share, and complaints to identify poor market conduct and promote fair competition. These are all areas currently being pursued by AFI’s working groups with support from the Competition Enablers and Knowledge Exchange (CKX) workstream.

AFI’s CKX workstream was launched in 2024 and is funded by the Gates Foundation.