Tanzania’s money supply grew by 17.4 percent, driven mainly by the sustained expansion of credit to private sector and improvement in net foreign assets of the banking system according to the Bank of Tanzania (BoT) Monthly Economic Review for September, 2023.
“The sustained growth of credit to the private sector reflects high demand for new loans consistent with improvements in the business environment and supportive fiscal policy,” the report shows.
Agricultural activities continued to record the highest growth of credit at 52.4 percent, backed by policy measures that were taken by the Bank to promote cost-effective credit intermediation, coupled with ongoing interventions by the Government to support the sector.
Personal loans continued to constitute the largest share of the total outstanding private sector credit, followed by trade, agriculture and manufacturing activities.
Interest rates charged by banks on loans maintained a stable trajectory with the overall lending rate averaging 16 percent in August 2023, similar to the preceding month.
Similarly, negotiated lending rates remained at an average of 13 percent while deposits rates rose slightly, with an overall deposit rate averaging 6.91 percent compared with 6.85 percent in July 2023.
“Negotiated deposit rates remained at 9.04 percent as in the preceding month. The spread between one-year interest rates stabilized at around 8.08 percentage points,” the report shows.