Brief Overview.
Financial technology (hereinafter referred to as “FinTech”) is any application, software or technology that allows individuals or businesses to digitally access and make financial transactions, usually through an online platform. FinTech companies offer digital solutions that rely heavily on technology. By doing so, they allows individuals and companies to enhance their access to financial products, lower fees, and provide faster, more personalised service.
A FinTech is basically launched by a FinTech company or an individual (depending on the legal framework of a particular jurisdiction) with the aim of facilitating the provision of financial solutions through technological innovations. There are several examples of Fintech companies operating in Tanzania such as Nala and Tala.
The Fintech industry in Tanzania operates within a payments market worth about United States Dollars 200 Billion[1] which is approximately Tanzanian Shillings 510 Billion (1 USD = TZS 2550 as of 13th August, 2025), of which a sizable amount is made up of mobile money transactions. The industry has witnessed a boom in mobile financial services, such as insurance, microloans, savings accounts, and mobile payments. The introduction of digital financial services in Tanzania has transformed the financial landscape, particularly in rural areas where access to traditional banking was previously limited.
The Legal Framework in Tanzania.
FinTech, as defined under Regulation 3 of the Bank of Tanzania (Fintech Regulatory Sandbox) Regulations issued under Government Notice Number 540 of 2024 (the “FinTech Regulations”), means technological innovation to be utilised in the provision of financial solutions in a area in which it is deployed for use. The FinTech Regulations also define FinTech companies as entities incorporated in the United Republic of Tanzania for the delivery of innovative financial solutions to the market.
The FinTech Regulations introduced by the Bank of Tanzania (hereinafter referred to as “the BOT”) provide a structured, controlled “test-and-learn” environment that allows both Fintech companies and licensed financial institutions to pilot innovative financial products or services prior to full-scale market deployment. The sandbox framework enables innovation within a regulated setting, ensuring an appropriate balance between flexibility for experimentation and safeguards for consumer protection and financial system integrity. Participants must comply with defined requirements relating to testing parameters, data privacy, reporting obligations and regulatory compliance. Successful participation may pave the way for eventual commercial rollout, subject to BOT’s approval.
According to the FinTech Regulations, eligible participants include, financial service providers already licensed by the BOT, FinTech companies intending to offer solutions related to financial services regulated by the BOT and FinTech companies working in collaboration with a licensed financial service provider.
FinTech companies in Tanzania are generally not subject to direct licensing requirements under the financial services legal framework unless they undertake regulated activities such as issuing electronic money, which requires an electronic money issuance licence under the National Payment Systems Act, Chapter 437, Revised Edition of 2023, providing loans to the public, which may necessitate a banking or financial institution or microfinance licence or operating a payment system, which requires a “payment system licence” under the same legislation.
Furthermore, while FinTech companies generally operate outside of the direct licensing purview of the BOT and often fall under what is referred to as "functional regulation", particularly where they engage in activities that intersect with the operations of regulated financial institutions. In such cases, the BOT expects the licensed partner institution, whether a bank, financial institution, or electronic money issuer, to conduct thorough due diligence before engaging any Fintech company, especially where core functions are outsourced, seek regulatory approval for material outsourcing arrangements, in accordance with the BOT’s outsourcing guidelines and risk management standards and ensure that the engaged Fintech company complies with equivalent standards of risk management, cybersecurity and compliance.
FinTech companies engaged in such partnerships are therefore required to implement appropriate internal controls, data protection protocols, transaction monitoring systems and ensure that their staff and systems meet the compliance expectations of the regulated financial partner.
Imogen Homanga – Legal Officer Note: This is not a legal opinion, and the contents hereof are not meant to be relied upon by any recipient unless our written consent is sought and explicitly obtained in writing.
[1] Tanzania the $200 Billion Fintech Market - Fintech News Africa
