AfricaPress-Tanzania: The private sector credit recorded a strong growth in the year ending August, which is consistent with the Bank of Tanzania (BoT)’s efforts to boost liquidity in the banking system.
According to BoT, monthly economic review credit to the private sector grew by 6.8 per cent in the year ending August, picking up from 5.5 per cent in preceding month.
The increase in the growth of credit to the private sector reflects a gradual normalisation of economic activities from the effects of Covid-19, coupled with the re-opening of the economies of the main trading partners.
Economic activities that recorded strong credit growth include, transport and communications, personal loans often used for small and medium enterprises and hotels and restaurants.
It is worth noting that hotels and restaurants recorded a positive growth of credit, bouncing back from a consecutive contraction recorded in the past two years.
In terms of share of outstanding credit, personal loans, trade and manufacturing continued dominating, accounting for 32.6 per cent, 16.5 per cent and 10.5 percent, respectively.
In the meantime, the annual growth of money supply remained strong consistent with the sustained accommodative monetary policy pursued by BoT to support the expansion of credit to various economic activities and ultimately economic growth.
In the year ending August this year, the extended broad money supply grew by 10.5 per cent, up from 8.5 per cent in August 2019.
The broad money supply, which excludes foreign currency deposits, grew by 10.2 per cent in the year ending August, compared to 11.4 per cent in August last year.
Foreign assets of the banking system recorded an annual growth of 3.0 per cent compared to a contraction of 1.5 per cent in August 2019.
The recorded growth was attributed to an increase in the claims of banks to non-residents following an increase in the exports of goods, mainly from the mining sector.
