Tanzania Mobile Money Tracker Study Wave 4 Report March 2013

Table of Contents Introduction ........................................................................................................................................................ 5 Executive Summary ........................................................................................................................................... 6 Mobile Money Awareness ................................................................................................................................ 8 Mobile Money Use...........................................................................................................................................14 Barriers to Mobile Money Use .......................................................................................................................24 Competing Alternatives to Mobile Money Use ...........................................................................................35 Appendix 1: Research Methodology .............................................................................................................42 Appendix 2: Subsample Bases........................................................................................................................45

List of Figures Figure 1. Total Awareness of Each Mobile Money Brand .......................................................................... 8 Figure 2. Percentage of Tanzanian Adults Who Could Spontaneously Name Each Provider .............. 8 Figure 3. Percentage of Tanzanian Adults Who Reported Seeing or Hearing a Mobile Money Advertisement in the Last Month ................................................................................................................... 9 Figure 4. Percentage of Tanzanian Adults Who Reported Seeing an Advertisement for Each Provider in the Last Month ............................................................................................................................10 Figure 5. Percentage of Urban and Rural Adults Who Have Seen or Heard a Mobile Money Advertisement in the Last Month .................................................................................................................10 Figure 6. “Which of the following statements would you say describes mobile money?” ...................12 Figure 7. Active Mobile Money Use among Tanzanian Adults ................................................................14 Figure 8. Mobile Money Use by Region in Wave Four ..............................................................................14 Figure 9. Mobile Money Use by Brand: Provider Used Most Frequently by Active Users ..................15 Figure 10. Percentage of Each Subsample Who Use Mobile Money ......................................................16 Figure 11. Mobile Money Use by Gender, Location, and Poverty Level ................................................17 Figure 12. Percentage of Active Users Who Began Using Mobile Money for Each Purpose .............18 Figure 13. Percentage of Active Mobile Money Users Who Used Each Mobile Money Service in the Previous Four Weeks (Wave 4) .....................................................................................................................19 Figure 14. Percentage of Tanzanians Who Use Each Mobile Money Service “Most Often” .............19 Figure 15. Most Important Factor When Choosing a Mobile Money Provider.....................................21 Figure 16. Percentage of Nonusers Who Report Not Using Mobile Money for Each Reason ...........25 Figure 17. Percentage of Active Users Who Experienced Each Agent Problem ..................................26 Figure 18. Mobile Money Users Share Their PINs With... .......................................................................31 Figure 19. The Percentage of Those Who Were Required to Make a Payment to Register, Who Paid for Each Purpose .............................................................................................................................................32 Figure 20. Locations Where Tanzanians Charge Their Mobile Phones ..................................................33 Figure 21. Percentage of Tanzanian Adults Who Used Each Method to Send or Receive Money in the Six Months Prior to the Survey ...............................................................................................................35 Tanzania Mobile Money Tracker Study: Wave 4

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Figure 22. Percentage of Tanzanian Adults Who Use Each Service “Most Often” to Send or Receive Money ................................................................................................................................................................36 Figure 23. Percentage of Tanzanian Adults Who Consider Each Delivery Method the: .....................37 Figure 24. Percentage of Tanzanian Adults Who Have Used Each Method in the Last Six Months to Save or Store Money........................................................................................................................................38 Figure 25. Savings Methods Used, by Urban or Rural Residence ............................................................39 Figure 26. Percentage of Tanzanian Adults Who Consider Each Method the: .....................................41 Figure 27. Base Sizes for Demographic and Geographic Analyses: Number of Tanzanian Adults Surveyed in each Category ..............................................................................................................................45

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About InterMedia InterMedia (www.intermedia.org) is a consulting group with expertise in applied research and evaluation. We help clients understand, inform and engage people worldwide – especially in challenging environments. InterMedia's offices are located in Washington, D.C., London and Nairobi, and we work with a global network of research partners. Clients active in international development, global media and strategic communication come to us for insight on how people gather, interpret, share, and use information from all sources and on all platforms. We provide guidance and impact assessment for strategies focused on engagement, behavior change, content delivery and the use of communication technologies for social benefit. InterMedia promotes knowledge sharing through a range of online and offline resources, including AudienceScapes (www.audiencescapes.org) – a research dashboard providing data and analysis on a variety of topics in developing countries. We are also committed to strengthening research capacity in the countries where we work.

Authors Michelle Kaffenberger, Research Manager, InterMedia [email protected] Sidra Butt, Research Manager, InterMedia Africa [email protected]

Acknowledgments The authors would like to thank their colleagues for contributions to this report: Abdinasir Abdi, Operations Manager Dixie Avugwi, Senior Research Manager Joe Bonnell, Qualitative Practice Manager Tim Cooper, Director of Research Peter Goldstein, Director of Foundation Relations Max Richman, Research Analyst The Tanzania Mobile Money Tracker Study is being carried out with funding from the Bill & Melinda Gates Foundation The research was conducted in Tanzania by InterMedia with Synovate and Ricochet Research, in conformity with the standards of the ICC/ESOMAR International Code on Market and Social Research (http://www.esomar.org/index.php/codes-guidelines.html). All survey materials and data resulting from this study are the property of the Bill & Melinda Gates Foundation, but the findings and conclusions presented in this report are those of the authors and do not necessarily reflect positions or policies of the Bill & Melinda Gates Foundation.

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Introduction With support from the Bill & Melinda Gates Foundation, InterMedia is undertaking a one-year tracking study to understand the drivers of and barriers to mobile money use among Tanzanian adults. Starting in September 2011, the study covers four waves, with each wave comprising four research components. This report is based on the results of the fourth wave of research, which took place from September to October 2012. Details on the technical research approach are provided in Appendix 1.

Quantitative and Qualitative Research Components, Wave Four Research Component

Respondent Profile

National Survey

A nationally representative sample of 2,000 Tanzanians 15 and older Six groups of registered mobile money users and six groups of nonusers in rural and urban Arusha and Dar es Salaam

Focus Groups

In-Depth Interviews Mystery Shoppers*

14 single-network mobile money agents, and 11 multinetwork agents in urban and rural areas 25 visits to mobile money agents in urban and rural areas

*Mystery shoppers are field researchers who played the role of potential customers and reported back on their experiences with m-money agents.

Active users, lapsed users, inactive users and nonusers The quantitative analysis defines active mobile money users as those who have used mobile money in the previous three months. Lapsed users have used mobile money at some point, but have not used it in the last three months. Nonusers have never used mobile money. The qualitative research defines active users as those who, on average, use mobile money two times or more per month. Inactive users are defined as those who use the services once per month or less on average. These definitions allow analysis of frequent and infrequent mobile money users. Nonusers are defined as those who have never used mobile money. Younger participant, older participant Focus groups were divided into two age groups. “Younger participant” refers to focus group participants who are 21 to 35 years old. “Older participant” refers to those 36 to 55 years old. Sample base sizes Base sizes for demographic and geographic breakdowns described in this report are provided in Appendix 2.

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Executive Summary Mobile Money Awareness Total awareness of mobile money, including both spontaneous recall and prompted recognition, rose to 99 percent of the Tanzanian adult population in wave four. Recognition of all brands increased except for NMB Pesa Fasta. Airtel Money experienced the largest increase, with recognition rising to 92 percent. This is a notable increase from its low point of 38 percent recognition six months earlier. In focus groups, most nonusers were able to name and distinguish the various mobile money service providers. Exposure to mobile money advertisements increased from 71 to 82 percent of Tanzanian adults. Exposure rose in both urban and rural areas, with rural areas reaching nearly the same level of exposure as in urban areas. Exposure to Airtel Money’s radio and visual advertisements almost doubled in wave four, and has more than quadrupled since last year. Many agents reported receiving an insufficient amount of marketing materials and said they do not receive updated materials on a regular basis.

Mobile Money Use Active mobile money use increased from 31 to 45 percent of Tanzanian adults in wave four. Airtel Money gained ground as the provider used “most frequently” by active users, while Vodacom’s M-PESA lost ground. Despite its drop in market share, Vodacom remains the most commonly used service by a wide margin. Unlike in the prior quarter, mobile money use increased across almost all demographic groups in wave four, rising for urban and rural residents, males and females, and for those both above and below the poverty line. Focus groups revealed that the sender of a money transfer often encourages the recipient to register for mobile money. Among mobile money users, receiving money continues to be the service used most often.

Barriers to Mobile Money Use Forty percent of nonusers report that lack of access to an agent prevents them from using mobile money, a five percent increase from the prior quarter. As in the previous three surveys, about one-third of nonusers reported a lack of need for mobile money as the reason they do not use the services. The number one difficulty among mobile money users continues to be agents with insufficient e-float − money held in an electronic account to make transfers and hold deposits. However, some agents said e-float problems have improved in recent months. Nonusers in focus groups reported that stories they hear from others about e-float problems, mobile money security, and network problems dissuade them from using mobile Tanzania Mobile Money Tracker Study: Wave 4

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money. Insufficient understanding of how mobile money works and how to operate the services also continues to be a considerable barrier among nonusers. Although registration should be free for all providers, almost half of mobile money users were required to make a payment when they registered. Eighty-five percent had to pay a “registration fee,” and 20 percent had to pay for a new SIM card. In focus groups, nonusers and inactive users cited mobile money’s cost as a primary reason for not using the services. However, they appear to have a poor understanding of the fee structure, often believing fees are higher than they are.

Competing Alternatives to Mobile Money Use Sending and receiving money via friends and family remains the most common delivery method, but mobile money gained ground in wave four. When asked which method they use “most often” to send or receive money, mobile money surpassed friends and family for the first time in wave four. Tanzanian adults continue to consider mobile money the safest, most convenient, least expensive, and fastest method for sending and receiving money, and mobile money gained ground in every category in wave four. Saving money at home or work remains the most common way to save, but the percent of Tanzanian adults saving with mobile money nearly doubled in wave four to 42 percent. More Tanzanian adults consider mobile money the safest, most convenient, and least expensive way to save in wave four than in previous waves, although mobile money is still not the best performer in any of these categories. Bank accounts are considered safest and saving at home or work is considered most convenient and least expensive.

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Mobile Money Awareness Total awareness of mobile money, including both spontaneous and prompted recognition, rose to 99 percent of the Tanzanian adult population in wave four. Recognition rose significantly for all brands except NMB Pesa Fasta. Airtel Money experienced the largest increase, with total recognition, at 92 percent, nearly reaching the level of Vodacom’s M-PESA. This is a notable increase from Airtel’s much lower 38 percent recognition in wave two. Figure 1. Total Awareness of Each Mobile Money Brand 93 92 97*

99*

98* 91 9194*

92* 74*

88* 76* 65 61

41 38

Total Recognition

Vodacom MPESA

Wave 1 Wave 2 Wave 3 Wave 4 33* 24 1928*

Airtel Money

Tigo Pesa

29

27*30 20

Zantel Z-Pesa NMB Pesa Fasta

Source: InterMedia tracking survey of Tanzanian adults; wave 1, N=2,000; wave 2, N=2,000; wave 3, N=1,999; wave 4, N=2,000; September 2011-October 2012. *Represents statistically significant changes compared to prior wave (p