Friday, September 25, 2009

Consumer Education

The Guardian of 24th.Sept.2009
It has been noted that lack of consumer education from the lower levels of learning institutions has meant that few Tanzanians are conversant with it, hence the government has been advised to incorporate it in the basic school curriculum.

Speaking in Dar es Salaam this week, Seif Hamis Simba, a programme officer with the Tanzania Consumer Advocacy Society (TCAS), said consumer education is often not clearly and easily understood as it means different things from person to person.

He said, both children and adults should grow into becoming well-informed and critical consumers of products, commercial services, and public service. According to Simba, the process entails not so much the provision of consumer information regarding products, services, the environment and other considerations but rather the continuous cultivation and development of living skills.

He expands on this that the skills would include such cognitive powers as critical and conceptual thinking, knowledge and understanding the impact of individual, business and government decisions on consumers. “Consumer Education involves the development of abilities to make decisions in the purchase of goods and services in the light of personal values, maximum utilization of resources, available alternatives, and ecological considerations,” he said.

He said consumer education at school level is essential to provide the skills and knowledge to empower consumers and enable them use their resources effectively and increase their awareness of their wider role in society.

According to him, consumer education addresses not only the problems of consumers individually but also of sustainable consumption, social justice, human rights, ethical values and overcoming poverty. Consumer education contributes towards the formation of a participative, critical and competent citizenship.

He said specifically, consumer education enables individuals to develop the ability to possess a critical, consumer-reasoned appraisal. Reasoned appraisal could include the overall implications, both to the individual and society, of consuming that particular product or service.

“Through consumer education, consumers are equipped with knowledge, skills and understanding of the market. Consumer education enables consumers to judge and make competent decisions about their financial transactions”, he said.

It also stimulates the nation’s social and economic development. Consumers, who exercise free choice based on knowledge of the facts will be able to make the best use of resources within their sphere of influence.

In his comments, consumer advocate Bernard Kihiyo said that there are four aspects of consumer education. The first aspect is informed choice where consumers must learn to obtain information about goods and services.

Also to distinguish between different sources of information, understand the psychology of selling and advertising, learn to shop wisely, distinguish between needs and wants, understand the alternatives of conserving and saving rather than buying and consuming.

Monday, September 21, 2009

TBL, EABL battle: Call for establishment of East African Competition Tribunal

DAILY NEWS Reporter, 20th September 2009 @ 14:34
THE Tanzania Consumers Advocacy Society (TCAS), has recommended for establishment of East African Competition Tribunal which will harmonise the regional competition legislation, following the legal wrangle between the East African Breweries Limited (EABL) and the Tanzania Breweries Limited (TBL).

The TCAS chairman, Mr Damon Mwakyembe, said there was no need for companies in the region to go to UK for competition dispute arbitration. The two beer companies are seeking arbitration in the UK, following the decision by EABL to buy substantial shares in Serengeti Breweries Limited (SBL). “Such tribunal will apply rules of competition, in respect of anti-competitive cross border business and promote and protect competition in the community.

We do not have to go to UK for competition dispute arbitration in future,” said Mwakyembe, the former Director General of Tanzania Bureau Service (TBS). He said while consumer groups need to support and encourage public awareness of competition issues, still restrictive practices could affect consumers when making shopping choices.

On the EABL/TBL dispute, Mr Mwakyembe said the possible divorce of the two should respect contractual obligations of the two companies.

He, however, said that Tanzanians have the right to discuss possible merger between SBL and EABL, because eventually consumers would be the ones to benefit or suffer by such decision.

The Chief Executive Officer for Parasol Real Estate Agent & Developers Limited, Mr Bernard Kihiyo, said that fairness was key in the free market economy.

Mr Kihiyo who is also the Executive Director for TCAS, said in April 2007; his organisation, conducted a survey to 3,000 respondents in five regions of Arusha, Kilimanjaro, Coastal, Mwanza and Dar es Salaam on competition.

He said 33 per cent of respondents said the merger of TBL and Kibo Breweries in 2002, had some anti-competitive arrangements that had serious consequences on beer prices.


Wednesday, September 9, 2009

Ghana hosts conference on consumer protection in Africa

More than 250 policy makers, regulators, journalists and representatives from financial institutions and their apex organizations, the education sector, consumer protection agencies, and development partners from over 30 countries will participate in an international conference scheduled for 8 to 9 September 2009 in Accra.
The conference would be hosted in collaboration with the Partnership for Making Finance Work for Africa (MFW4A on the theme “Promoting Financial Capability and Consumer Protection – A Step Forward Towards Financial Inclusion in Africa.”
A statement from the Ministry of Finance and Economic Planning issued in Accra on Thursday, quoted Dr Kwabena Duffuor, Minister of Finance and Economic Planning saying” Promoting financial capability is about raising awareness, promoting knowledge, building trust, and changing behaviour.”
“And it is not limited to educating consumers and enabling them to take informed decisions on saving, loan and investment products.
Additionally, management and staff of financial institutions need to be trained to become more responsive to the needs of their clients, and supervisors need the capacity to protect the consumers against fraud and other bad business practices.”
It is being organised against the background that low-income households in Africa often have limited access to demand-oriented and affordable financial services.
They include savings, loans, and insurance, which means that they have to revert to more expensive and less secure traditional alternatives of saving and borrowing and remain vulnerable to adverse shocks.
Research has shown that in order to strengthen financial institutions in Africa, there is the need to promote financial capability, to empower people to be capable of managing their financial assets and liabilities and to better understand their rights and responsibilities vis-a-vis financial institutions.
However, strengthening the financial capability of the population is not sufficient since governments also have a role to play in protecting consumers by ensuring that financial institutions apply recognized standards and suitable codes of conducts.
In order to create sustainable ‘win-win situations’ in this long-run, it is believed that financial capability measures need to go hand in hand with responsible, transparent and reliable services provided by financial institutions.
In moderated regional and national working groups, participants will have the chance to develop ideas and proposals as to what they think should be done in their country or region to improve financial capability.
A panel on social marketing will show films and discuss which marketing channels can be used best to address the different target groups of financial capability campaigns.
The Government of Ghana, together with the Ghana Microfinance Institutions Network (GHAMFIN), will hold as a prelude to the conference, a day’s Pre-Conference on “Promoting Financial Capability and Consumer Protection in Ghana” on September 7, 2009.
According to Mr Seth Terkper, Deputy Minister of Finance and Economic Planning, “Financial capability is very high on the political agenda of the Government.”
He said “Ghana is one of the first countries in Africa that has developed and started to implement a National Strategy for Financial Literacy and Consumer Protection in the Microfinance Sector”.
Over the past two years, “financial literacy road shows” have been carried out in all 10 regions of Ghana, easy-to-understand educational materials have been developed and distributed, high school quizzes have been organized, and radio programs on saving and responsible borrowing as well as television sitcoms on insurance have been telecast.
All activities will culminate at the Ghana Financial Literacy Week, which will take place from 28 September 28 to October 3, 2009.
Against this background, over 150 Ghanaian and international financial sector champions from the public sector and the financial sector as well as representatives from academia, consumer protection agencies, non-governmental organizations and development partners will discuss and evaluate whether “Ghana is on track and set the right priorities in financial capability and consumer protection”.
Additionally, innovative topics such as “Integrating Financial Capability into High Schools” and “Promoting Financial Capability through Mass Media” will be addressed.
Source: GNA;

Sunday, September 6, 2009

Mobile Phone Money Transfer: Consumer Education is of Paramount Importance.

Tanzania has seen remarkable gains on mobile phone service uses; there had been rapid uptake of various services key among them the mobile phone based solution for money transfer.

Mobile phone banking is mainly used for money transfer and information sharing, this system frees up consumer from traditional banking system, mobile phone money transfer needs customer to register with service provider once, set up user ID/password hence allowing a customer send, receive money, and pay bills while on-the-move and anywhere in Tanzania anytime s/he pleases.

Mobile money banking started with the creation of services by the banks which could enable bank account holder to access certain information through his/her mobile phone. These facilities aimed to enable customers to access information relating to their accounts or transfer money.

According to Financial Sector Deepening Trust for Tanzania (FSDT), the most recent data available indicates that less than 10% of adult Tanzanians reported having access to a formal banking such as having a bank account; this leaves a percentage of more than 90% outside the bracket out of reach for mainstream banking such as conventional tellers or ATM networks of banks.

So to say mobile phone money transfer such as NBC mobile service, Zap for Zain and M-Pesa for Vodacom are essential opportunities for consumers to narrow down the gaps left by traditional banking systems. This service already reaches unbanked persons in rural and urban areas in Tanzania, most agents happen to be air time distributors or retail outlets for handsets that manage cash transactions during money transfer.

Availability of multiple outlets across the country implies more points of contact with customers as opposed to the traditional banking hall set up. Additionally, the flexible operating hours of the mobile phone agents leaves them with greater opportunities to satisfy banking requirements that may arise at any time. On the contrary banks operate for an average of eight hours per day. The supplementary Automated Teller Machines (ATMs) do not have a sufficient outreach since they are only available in major towns.

While the fees charged for transactions are largely below those levied by traditional banks for similar services, low incomes amongst the vast proportions of the population tends to reduce the levels of affordability, I presume that prices are expected to decline over time as competition intensifies.

Observably population categories with lower levels of education happen to be the larger user category. The capacity for unschooled and semi illiterate persons to quickly capture the skills of manipulating the considerably sophisticated mobile phone menu items is still questionable.

Though not seriously impaired, the capacity of a wider population of Tanzania users is fairly curtailed by not being fully conversant with all that they can accomplish through the mobile. Deliberate interventions must be undertaken to successfully ensure that the targeted persons particularly the rural residents and females are empowered not only with technology but with skills and finance as well.

To prevent these communities from lagging behind they must be familiarized with the benefits and opportunities of mobile banking. Calculated strategies to overcome hindrances require exploration so that these groupings can be converted into meaningful participants who will utilize this technology for economic take off. Mobile phone money transfer signifies is the fact that M-banking has created a formidable avenue for income redistribution.

Other challenge is, rural areas are faced with numerous challenges including how to manage the float (Cash) in light of prospected demand. Operators have tended to focus mainly on the densely populated economic zones; more so increase in local and international money transfers services with maximum consumer protection; against risks of fraud, loss of privacy and even loss of service is extremely critical for growth of m-banking.

The fair and transparent treatment of customers is not always ensured and the lack of financial capability is still being exploited negatively. The providers of financial services need to understand that they stand to gain themselves from an informed customer decision.

This sort of service revolution should led to make finance work for Tanzania, we should ask ourselves ‘’did we set the right priorities in financial literacy and consumer protection?’’ “What do we need to do (better) right now to make finance work for Tanzania and Africa as a whole?”, things such as to empower people to be capable of managing their financial assets and liabilities by better understanding their rights and responsibilities.

In order to protect consumers it is inevitably not to do; awareness creation and social marketing to behavioral change, increasing consumers’ financial capability which aims at empowering consumer. The government thorough sectoral regulatory authorities (in this case Bank of Tanzania and Tanzania Communication Regulatory Authority) also have a role to play in protecting consumers by ensuring that financial institutions, business firms, fund raiser through mobile phone and mobile phone service providers; provide regular reliable information and apply recognized standards and suitable codes of conducts.

We need to develop a national strategy on consumer education and financial capability. These strategies aim, among other things, at including financial capability into schools, to educate the public on financial capability and to design training programmes for financial service providers.

We need to prepare a clear money transfer laws to clarify the responsibility of service provider in order to strengthen consumer protection in Tanzania as well as establishing appropriate safety net procedures which immediately provide remedies if consumer involved into controversial deal. Failing to plan today is planning to fail in future, it is now or never.

We are making a special request to strengthen collaboration among relevant organizations through establishment of a liaison committee on a regular and on-going basis consisting of banks, service provider, regulatory authorities, consumer groups, lawyers, Tanzania private Sector Foundation, Tanzania National Business Council, Confederation of Tanzania Industries, Tanzania Chamber of Commerce and others to join us to prepare joint operations for consumer protection.

Only when there is knowledgeable consumer in place and thereby strengthening institutions and building capacity for sound decision making, proper progress can be made in the other areas of democratic governance, including agriculture, economic and social development, welfare, and many others.