Private sector credit growth in Tanzania remained strong with an annual rate of 22.5 per cent in December 2022, reflecting ongoing recovery of economic activities from the effects of COVID-19 pandemic, complemented with supportive monetary and fiscal policies.
According to the Bank of Tanzania (BoT) Monthly Economic Review for January 2023, all major economic activities recorded credit growth, except hotels and restaurant.
“Credit to agriculture activity registered the highest growth, attributable to the monetary policy measures rolled out by the Bank to provide cost-effective credit intermediation to agriculture and agri-business activities,” the report said.
In terms of share, the Central Bank said the largest portion of outstanding loans were held in personal undertakings, followed by trade, manufacturing and agriculture activities.
Meanwhile, interest rates charged by banks on loans remained virtually unchanged in December 2022, compared with the rates registered in the preceding month and corresponding month in 2021.
“The overall lending rate averaged 16 percent, whereas negotiated lending rates were around 13 percent,” the report said.
The overall deposit interest rate averaged 6.94 percent, slightly lower than 7.28 percent recorded in the preceding month, but was higher than 6.74 percent recorded in December 2021.
Meanwhile, negotiated deposit rates averaged 8.88 percent in December 2022, slightly below 9.5 percent in the preceding month and 9.82 percent in December, 2021.