Tanzania: banks increase domestic credit

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Domestic credit in the banking system grew at an annual rate of 10.6 percent in September this year, up from 6.2 percent in the corresponding period last year, thanks to both government credit central and private sector.

According to the Bank of Tanzania (BoT) Monthly Economic Review of October, central government credit by banks through purchases of government securities rose 39.5% from a contraction of 7.7% .

Credit extended to the private sector by banks remained strong, although it grew at a slower pace of 5.2 percent compared to 9.3 percent in the corresponding period last year.

Credit was mainly given to transport, communications, personal activities (mainly micro, small and medium enterprises), hotels and restaurants.

The annual growth in credit to transport and communications increased by 23.8% compared to 0.6% recorded in the corresponding period last year.

The annual growth in credit extended to hotels and restaurants during the reference period increased by 9.9 percent compared to -11.8 percent recorded during the same period last year.

The annual growth in building and construction credit during the period under review fell by 6.6 percent compared to the 62.7 percent growth recorded in the corresponding period last year. .

Regarding shares in outstanding credit, personal loans, commerce and industry continued to represent the largest shares with 33.3 percent, 16.0 percent and 10.0 percent, respectively. hundred.

The BoT has maintained the implementation of accommodative monetary policy in support of a rapid recovery in economic activity through the expansion of credit to the private sector, as the global impact of Covid-19 wears off.

The policy stance led to an increase in the enlarged money supply of 1.78tri / – in the year ending September, equivalent to 6.5 percent from 9.4 percent in September of l ‘last year.

Much of the increase in domestic credit was extended by the banking system. Broad money supply increased 9.1 percent from 9.8 percent.

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