Private sector credit in Tanzania grew by 22.5 percent in February 2023, as compared to 11.9 percent recorded during the corresponding period last year attributable to supportive monetary policies, ongoing recovery of private sector from the COVID-19 pandemic effects and improved business environment according to the Bank of Tanzania Monthly Economic Review for March, 2023.
According to the Central Bank report credit to agricultural activities continued to register the highest growth, attributable to the introduction of a special loan facility by the BoT to banks for on-lending to private sector, particularly agricultural activities.
“Loans granted to personal (micro, small and medium enterprises) remained the main driver of the growth of credit to the private sector, followed by trade, agriculture and manufacturing activities,” the report shows.
In terms of share to total outstanding credit, personal loans continued to dominate, followed by trade, manufacturing, and agriculture.
Meanwhile, Interest rates charged by banks on loans were marginally lower in February 2023 relative to the preceding month and corresponding month in 2022.
The overall lending rates averaged 15.96 percent compared with 16.29 percent in January 2023 and February 2022.
Similarly, negotiated lending rates eased to 13.75 percent from 14.19 percent in preceding month, and 13.99 percent in February 2022.
“In general deposit rates offered recorded a slight increase compared with the similar month in 2022, but were lower than rates recorded in January 2023. Specifically, overall time deposit rate averaged 7.18 percent in February 2023, compared with 7.02 percent and 7.38 percent in February 2022 and January 2023,respectively,” the report said.
Negotiated deposit rates averaged 9.37 percent, slightly above 9.30 percent in the preceding month, but lower than 9.74 percent in February 2022.
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