A dawn of Takaful industry in Tanzania
Tanzania Insurance Regulatory Authority issued new guidelines which became effective this month include the Islamic Insurance called Takaful, which is open to all and Digital Insurance Platform to give new directions for Tanzania Insurance industry.
The expectations behind these guidelines are to increase penetration and creation of new jobs. United Republic of Tanzania is geographically located in East Africa with 34.5% Muslim Population. The step for Takaful Guidelines by Tanzania Insurance Regulatory Authority is a role model for Muslim Majority countries those do not have any regulations for Takaful Industry.
Tanzania’s financial Industry is very developed, there are 48 licensed banks in Tanzania: 35 commercial banks, 5 community banks, 4 microfinance banks, 2 mortgage banks, and 2 development banks and there are 27 Insurance companies as well.
Government of Tanzania announced in March to issue Takaful Regulations, in this regard Tanzania Insurance Regulatory Authority issued Takaful Guidelines 2022 in April. Insurers are now bound to comply with all requirements when marketing a takaful product and comply with Shariah law.
TIRA also introduced guidelines regarding the insurance sales force and the digitalization of the industry which will enable graduates to spread the products across the country and allow various universities and web aggregators to design various and affordable products.
The on sales force executives guidelines seek to address the market need of enhancing the distribution, penetration, employment and availability of insurance services. The expected outcome from it provides the avenue for growth of the Insurance Sector and meets the socially justifiable needs of the community.
On the occasion of the launching ceremony, Commissioner for Insurance Dr Baghayo Saqware said that I am calling on the stakeholders to ensure they follow all the requirements while they are implementing products such as Takaful.
It should comply with the Shariah basis,” he said. He said in order to allow implementation of both guidelines, people who want to sell the insurance must be endorsed by companies or authorities and must follow the requirements which will be available in the guidelines.
All the guidelines help to attain the targeted 50 percent of adults to use at least one insurance product by 2030. “The guidelines we are launching will start operation in May this year whereby companies can sell insurance “We want to spread insurance countrywide especially in areas that are yet to be reached.”
On the decision of Takaful Industry Reforms and regulations in Tanzania, Mr. Muhammad Zubair Mughal, Chief Executive Officer AlHuda Centre of Islamic Banking and Economics wished very good luck to Tanzania insurance industry for this up front opportunity towards sustainable financial system. He praised the decision of the Government of Tanzania and Tanzania Insurance Regulatory Authority for their strategic vision about financial inclusion and development.
He highlights the prevailing importance of digitalization, cost effective marketing strategy and efficient outcomes for insurance sector financial inclusion towards country GDP and companies’ growth. He also stated that Islamic Banks or Window operations for Islamic banking that already exist now also can offer Bancatakaful products; previously there were certain limits because of unavailability of Islamic insurance products.
Tanzania’s financial industry is flourishing for Islamic bonds and Islamic capital market, these regulations will play a supportive role for further development. AlHuda CIBE is working for the development of Islamic finance industry; this phase will add new experience in AlHuda CIBE journey with its pleasant presence in the market.—Zawya News
