By Yakobe Chiwambo (www.businesstimes.co.tz)
DESPITE the rapid growth of telecommunication technologies the world over in
the area of money transfers, many Tanzanians still prefer to send money to
relatives, friends and other dependents by passenger bus countrywide – the
ready availability of other methods such as bank transfers, money
grams/Western Union and mobile telephony transfer services notwithstanding!
The reason(s) for this are as unfathomable as they are curious… This is
especially considering that the bus companies involved charge almost ten
times more for the service than what the mobile telephony and other
high-tech operators charge!
The reason(s) could, of course, simply be sentimental. Money transfers by
bus in Tanzania started more than five years ago, when the modern
technological fads were still unknown. This historical inertia could very
well be fueling the wish to continue dealing with the devil you know, so to
speak!
A week-long survey by Business Times established that the Akamba Bus
Company; Dar Express; Kilimanjaro Express and Mtei Express – all of which
have offices in Dar es Salaam – local bus companies – are among the
providers of money transfer services, and provide considerable competition
against the more sophisticated providers of similar services!
Officials of these bus companies who spoke to Business Times confirmed that
there is a goodly number of Tanzanians who utilise their services as a
matter of course. This is despite the facts that their commission rates are
much higher – and their delivery services relatively slower!
For instance, sending money by Western Union and similar service providers
within Tanzania costs one per cent (or less-than-one per cent) of the amount
being transferred.
For their part, the mobile telephony companies charge between one and two
per cent of the transacted money, depending on the mobile firm concerned.
By comparison, however, the bus companies charge not less than ten per cent
of the value of the money involved!
Besides, while the high-tech money transfer services take seconds or minutes
from Point ‘A’ to Point ‘B,’ the bus transfer services take hours – and even
days.
This is partly because the delivery/payment instructions are conveyed to the
destination along with the parcels manifest of the transporting bus, usually
traversing rough terrain in infrastructure-poor Tanzania!
Roughly, what this means is that the person for whom the money is intended
at Point ‘B’ can only access the money if and when the bus involved reaches
the relevant destination hour, days later!
Speaking to Business Times in separate interviews, officials of the four
surveyed bus companies admitted to providing money transfer services in
addition to their traditional services of conveying passengers and parcels.
They also agreed to charging a commission of ten per cent for the service,
based upon the amount of money being so transferred.
However, none of them could say why customers still flock to the bus
companies for money transfer services when the services are slower and more
expensive compared to the services provided by the banks and mobile
telephony companies.
Again, none of them were able to confirm that their companies are authorised
to offer such financial services in terms of the country’s financial
services legislation.
At one point in time, the Bank of Tanzania (BoT) was looking into the
possibility of formalizing the money transfer service for bus firms.
Reportedly, however, the the firms did not cooperate with the central bank
and, instead, preferred to go on with the businesses on the sly, as it were!
Interviewed by Business Times during the 35th Dar International Trade Fair
last month, some BoT officials said the central bank was aware of money
transfer transactions by bus companies. But, for lack of cooperation on the
part of the bus owners, moves to formalise the business for the benefit of
all have not been successful so far.
In the event, it has not been possible to gauge the volume of the money
transfer business using buses.