Climate finance and sustainable banking in Tanzania (2020-2024): Emerging roles of AI, mitigation strategies and regulatory developments - a literature review

https://doi.org/10.51867/scimundi.6.1.2

Authors

Keywords:

Artificial Intelligence, Banking Sector, Climate Adaptation, Climate Finance, Mitigation Strategies, Tanzania Breweries Limited

Abstract

Despite the growing importance of implementing climate finance and mitigation strategies within Tanzania’s banking sector, particularly regarding the emerging role of Artificial Intelligence (AI), the supporting regulatory frameworks remain under-researched and insufficiently documented. This paper reviewed the state of climate finance and mitigation strategies, including the application of AI within the banking sector from 2020 to 2024. The study adopted a qualitative approach by synthesizing data from a comprehensive literature review that included published annual reports from 44 licensed banks in Tanzania (2020–2024), as well as grey literature such as policy documents, regulatory guidelines, and global development reports. The analysis is theoretically grounded in the Technology Acceptance Model (TAM) for AI adoption and institutional theory for regulatory and isomorphic pressure, providing a structured lens for evaluating sustainable banking practices. The findings indicate that there is a shift in the banking sector, with Tier 1 banks leading in green finance product innovation and AI-driven risk assessment, while mid-tier institutions focus on digital infrastructure and compliance. The banking sector in Tanzania, especially CRDB Bank and NMB Bank, is making a lot of progress in climate finance. CRDB Bank has secured substantial Green Climate Fund (GCF) financing for climate-resilient agriculture and has also launched a Green Bond Initiative (USD 300 million). On the other hand, NMB Bank has committed significantly to sustainability strategies and climate actions. The bank launched Jamii Bond (TZS 400 billion) in 2023. Additionally, these efforts are supported by regulatory guidelines developed by the Bank of Tanzania (BoT), which promotes and guides the incorporation of climate-related financial risks into banking operations. Despite the progress achieved, a finance mobilization gap remains, as only 3.6% of targeted climate finance was achieved by 2020, and the projected funding gap of USD 60–70 billion is anticipated by 2025, highlighting both challenges and opportunities for AI integration in bridging these gaps. The paper concludes that the Tanzanian banking sector plays a crucial role in supporting climate change financing and mitigation strategies. For this role to be effectively enhanced, capacity building in AI and climate finance analysis and innovative product development and strategic partnership are very essential to mobilize and access domestic and international resources. Improve transparency, and foster AI-driven climate-resilient growth for sustainable development.

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Published

2026-01-09

How to Cite

Emmanuel, M. K. (2026). Climate finance and sustainable banking in Tanzania (2020-2024): Emerging roles of AI, mitigation strategies and regulatory developments - a literature review. SCIENCE MUNDI, 6(1), 10–20. https://doi.org/10.51867/scimundi.6.1.2

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Vol. 6 No. 1 (2026): Jan-Jul 2026

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Articles
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Copyright (c) 2026 Magreth Kulwa Emmanuel

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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