Credit extended to the private sector in Tanzania has continued to record strong growth backed by improved business conditions, and supportive fiscal and monetary policies according to Tanzania’s Central Bank.
Accordingly to the Bank of Tanzania (BoT) Monthly Economic Review for June 2023, private sector credit recorded a year-on-year growth of 22.5 percent in May 2023, compared with 15 percent in May last year.
The decomposition of credit by economic activities indicates that credit to agricultural activities continued to record the highest growth, at 40.9 percent, followed by transport and communication.
“Loans extended to personal undertakings, primarily for small and medium enterprises, remained the major contributor to credit growth, followed by trade, manufacturing and agricultural activities,” the report shows.
Personal loans continued to account for a significant share of the total credit, followed by trade and manufacturing activities.
Interest Rates
Interest rates charged by banks on loans and those offered on deposits remained generally unchanged in May 2023 from the levels recorded in the preceding month.
“The overall lending rates averaged 15.96 percent compared with 15.91 percent in April 2023,” according to the report.
Similarly, negotiated lending rates eased to an average of 13.02 percent from 13.65 percent in the preceding month.
“Time deposit rates averaged 6.91 percent compared with 6.79 percent in the preceding month, while negotiated deposit rates averaged 9.24 percent, lower than 9.46 percent in the preceding month,” according to the report
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