The Bank of Tanzania (BoT) introduces a regulatory sandbox for fintech startups, marking a significant step in fostering innovation in Tanzania's financial technology sector. This initiative aims to create a controlled environment for testing new financial products and services that still need to fully comply with existing regulations.
The initiative also aims to support fintech innovators in transitioning from an unregulated to a regulated environment, providing a pathway for sustainable growth and integration into the formal financial sector. This regulatory sandbox aligns with Tanzania's broader efforts to promote financial inclusion and digital innovation.
The sandbox is open to a range of participants, including financial service providers licensed by BoT, fintech companies collaborating with licensed providers, and those intending to offer solutions to BoT-regulated financial services. The application process involves quarterly invitations from BoT, with applicants required to submit an application form, risk profile, and supporting documents within 30 days of invitation.
The evaluation criteria for applicants are rigorous. They focus on innovative technology use, the potential to address market gaps, and the demonstration of adequate testing resources.
Successful applicants will have a specified timeframe to test their solutions in a live market environment, allowing real-world assessment of their innovations. The sandbox's key aspect emphasises consumer protection, balancing promoting innovation and safeguarding consumer interests.
Following similar initiatives in neighbouring East African countries, Tanzania's fintech sector is expected to accelerate its growth, comprising about 8.83% of its 842 known startups.
