Private sector credit in Tanzania continued to record strong growth, at 21.2 percent in the year to June 2023, mainly due to improved business conditions, additional policy measures that were instituted by the Bank to stimulate cost-effective credit growth, and supportive fiscal policy.
According to the Bank of Tanzania (BoT), the rate was slightly above the 19.4 percent registered in the corresponding period in 2022.
Credit for agricultural activities continued to record the highest growth, at 40.6 percent, followed by transport and communication at 22.1 percent.
Personal loans, which are largely utilised for personal undertakings—primarily small and medium enterprises—and accounted for a significant share of the total credit, remained the major contributor to credit growth, followed by trade, manufacturing, and agriculture activities.
Interest rates charged by banks on loans had a mixed trend; while average overall lending rates remained the same as in May 2023, negotiated lending and short-term lending rates slightly increased.
Deposit rates recorded a slight decrease, resulting in a widening of the short-term interest rate spread to 8.89 percentage points from 8.26 percentage points in May 2023