The Factors Affecting the Adoption of Financial Technologies (Fintech) by Tanzania’s Informal Sector for the Growth of their Assets
Authors: Matari Davis , Temba Ruth 
Published: January 2025

Tanzania has a significant presence of informal employment, with a substantial portion of its workforce engaged in the informal sector. This segment of the economy is characterized by activities that are not regulated by the government and often lack formal documentation, such as contracts or social security benefits. The informal sector in Tanzania is substantial in size, contributing notably to the country’s overall economic activity The application of the FinTech have played major roles to the informal sector effecting and improving business performance as far as financial transactions are involved creating future sustainability to the specific businesses done by the use of different financial system and tools applied. The aim of the present research is to cast light on the positive factors and barriers affecting the adoption of the financial technologies by the informal sector of Tanzania and its implication on the assets growth. Similar to many Sub-Saharan African countries.

This study employs a thematic review as a secondary research method. This approach involves a meticulous examination of peer-reviewed articles and academic journals. The objective of this research is to identify the factors that both facilitate and impede the adoption of Fintech in the informal sector. By analyzing these factors, the study aims to understand how the adoption processes influence the use of Fintech and subsequent asset growth, which in turn affects business development. To gather relevant literature, keyword searches will be conducted on academic databases such as Google Scholar and Mendeley

The study reveals that the adoption of Fintech in the informal sector is influenced by a range of internal and external factors. Internally, attitudes and perceptions play a role, while externally, socio-cultural, economic, and political factors are at play. Factors that facilitate adoption include the desire to expand market and client bases and to enhance customer satisfaction. In line with other African countries, a significant portion of employment in Tanzania is within the informal sector, where Fintech remains underutilized. The primary barriers to technology adoption are social and economic, leading to a reluctance among individuals to embrace digital financial services. However, the study suggests that with access to reliable internet and smartphones, individuals are more likely to use digital banking. Mobile phones are the predominant device used for implementing Fintech in informal businesses, as indicated by various studies.

Therefore, the study recommends that access to financial technologies for offering financial services should consider; costs, continuous training to enhance digital literacy, a set of proper and fair trade policies, and ensuring stakeholder participation in informal sectors like; provision of loans and other free financial support, workshops and gatherings. This will help many informal businesses to have better performance as well as enhance the technological innovations for their self-business growth that assist in the contributions of the individual and government economies.