Africa-Press – Tanzania. THE demand for new loans is expected to pick up in the outer period, owing to ongoing initiatives by the government to improve the business and investment climate.
The Bank of Tanzania (BoT) monthly economic review for June said also that the normalization of economic activities from the pandemic, sustained accommodative monetary conditions and fiscal discipline will contribute to increased demand for loans.
During the reference period, the domestic credit, extended by banks to the private sector and central government, registered positive development in the recent months in favour of recovery of loans to the private sector, despite global effects of Covid-19, which spilled over to businesses and investments.
The annual growth of credit to the private sector was around 4.7 per cent in May this year and 4.8 per cent in the preceding month up from 2.3 per cent in March 2021.
The outturn was broadly in the same range as in May last year where it grew by 5.1 per cent. For the past six months the personal activities largely representing lending by banks to micro, small and medium enterprises, continued to register the strongest growth of credit.
In terms of share to total private sector loans, personal activities remained dominant, followed by trade and manufacturing activities. In the meantime, the annual growth of extended broad money supply recorded an increasing trend since February this year responding to the sustained accommodative monetary policy conditions.
The extended broad money supply grew at 7.9 per cent in May this year compared with 7.8 per cent in the preceding month, largely due to an increase in foreign assets and credit to the private sector. Likewise, the broad money supply grew by 7.7 per cent compared with 7.1 per cent in the preceding month.
