Tanzania's Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the nation’s economy, driving growth and providing livelihoods to millions. According to the Tanzania National Bureau of Statistics, there are over 3.1 million MSMEs in the country, contributing approximately 27% to the national GDP and employing more than 5.2 million people. However, despite their significant role in the economy, many MSMEs still rely heavily on cash transactions, exposing them to various risks that can hinder their growth and profitability.

This is where Smartnology steps in. By providing robust cashless solutions, we enable MSMEs to overcome the limitations of cash-based operations and embrace a more secure, efficient, and scalable way of doing business.

The Risks of Storing Cash: A Closer Look

Risk of Theft and Robbery: According to a 2022 survey by the Tanzania Private Sector Foundation, over 40% of small businesses in Tanzania have experienced theft or robbery involving cash. MSMEs, especially small shops and businesses, are often targeted by thieves, leading to devastating losses. A single robbery can not only drain a business's daily earnings but also leave the owner financially strained, with limited options to recover quickly.

Operational Inefficiencies: Research from the World Bank indicates that cash handling errors can affect up to 15-20% of transactions in small businesses, leading to significant financial discrepancies. Business owners and staff spend valuable time counting, reconciling, and depositing cash at the bank, which could otherwise be used to improve operations or engage with customers. Additionally, cash handling errors can lead to significant financial discrepancies, impacting the business's bottom line.

Limited Access to Financial Services: According to the Financial Sector Deepening Trust (FSDT) in Tanzania, around 70% of MSMEs have limited or no access to formal credit due to a lack of transaction records. Cash-based businesses often struggle to access credit or financial services, as they lack the necessary transaction records that banks require. This limits their ability to invest in growth opportunities, purchase inventory, or expand their operations.

Customer Inconvenience: With mobile money penetration in Tanzania exceeding 80%, as reported by the Tanzania Communications Regulatory Authority (TCRA), customers increasingly expect the convenience of cashless transactions. Businesses that only accept cash risk losing out on potential sales, especially from younger, tech-savvy customers who prefer mobile payments or card transactions.

The Solution: Cashless Systems by Smartnology

Embracing cashless systems is not just a trend—it’s a necessity for MSMEs looking to thrive in today’s economy. Smartnology offers solutions that are tailored to the needs of Tanzanian MSMEs, ensuring that businesses can operate more securely, efficiently, and competitively.

• Enhanced Security: Digital transactions reduce the risk of theft and robbery by up to 80%, according to the Tanzania Institute of Bankers. Funds are transferred directly to the business’s bank account, eliminating the need to store large amounts of cash on the premises.

• Streamlined Operations: Automated payment processing can reduce the time spent on manual cash handling by 50%, as per studies by the International Finance Corporation (IFC). This minimizes errors, ensures accurate financial records, and allows business owners to focus on growth and customer service.

• Improved Access to Credit: A report by the Bank of Tanzania indicates that MSMEs using digital payment systems have a 60% higher chance of securing loans. Digital payment records make it easier for MSMEs to demonstrate their financial stability to banks and other financial institutions, opening doors to credit and investment opportunities that are essential for expansion.

• Increased Customer Satisfaction: According to research by the Tanzania Chamber of Commerce, Industry, and Agriculture (TCCIA), businesses that offer multiple payment options, such as mobile money, debit and credit cards, and online payments, see a 30% increase in sales. This enhances customer experience, leading to increased customer loyalty.

Tanzanian MSMEs play a pivotal role in driving the nation’s economy. However, to continue contributing to economic growth and create more jobs, these businesses must adapt to the changing landscape by embracing cashless systems. The solutions provided by Smartnology offer MSMEs the tools they need to operate securely, efficiently, and competitively, ultimately positioning them for long-term success. By transitioning to a cashless system, Tanzanian MSMEs can not only avoid the disadvantages of storing cash but also unlock new opportunities for growth and innovation.