Private sector credit up 19.4% in June on improved business environment

Private sector credit registered a 19.4 per cent growth in June from 15 per cent recorded during the preceding month being the highest growth recorded in the past five years according to the Bank of Tanzania Monthly Economic Review for June released yesterday.

According to the report, the strong growth was largely attributable to improved business environment and ongoing recovery of private sector activities, coupled with supportive fiscal and monetary policy conditions.

Economic activities that exhibited strong growth of credit from banks were agriculture, mining, micro, small and medium undertakings, trade and manufacturing.

“Personal loans continued to account for the largest share of outstanding stock of private sector credit, followed by trade, manufacturing, and agriculture activities,” the report noted.

During the June 2022, interest rates charged on loans by banks, declined marginally in June 2022, with the overall lending rate averaging 16.2 per cent compared with 16.25 per cent registered in the preceding month.

“Negotiated lending rate charged to prime customers averaged 14.2 per cent compared with 14.4 per cent recorded in the preceding month.

The Interest rates offered by banks on deposits increased slightly in June 2022 compared to the preceding month with the overall deposit rate averaged 6.8 per cent compared with 6.6 percent in the preceding month.

Meanwhile, negotiated deposits rate averaged 9.4 per cent compared with 9.6 percent recorded in May, 2022.