Africa-Press – Tanzania. THE growth of domestic credit remained positive, expanding at 8.9 percent in July 2021 compared with 6 percent in the corresponding period last year thanks to the measures taken by the Central Bank to reduce lending rates.
According to the Bank of Tanzania (BoT) monthly economic review for August demand for credit is expected to increase owing to policy measures taken in July this year to reduce lending rate and promote credit to private sector. For example, due to this measure the private sector credit growth is projected at 11.6 per cent in 2021/22.
Growth of broad money supply improved to 12.1 percent from 10.6 percent last year. Credit extended to the private sector grew by 4.1 per cent albeit still lower than 5.5 percent recorded in July last year.
Much of the credit was directed to small and medium enterprises, commonly referred to as personal loans, followed by mining and quarrying, and trade.
Personal activities accounted for the largest share of credit, followed by trade and manufacturing The ongoing implementation of measures to improve business environment and recovery of the global economy will add impetus to private sector growth momentum.
The Bank of Tanzania sustained implementation of liquidity expansion in July 2021 to facilitate fast recovery of economic activities, particularly those adversely affected by the pandemic.
As a result of the expansionary monetary policy stance, growth of extended broad money supply increased to 11 percent compared with 8.9 percent in the year ending July last year.
