AfricaPress-Tanzania: LENDING to agriculture sector slowed in year ending February after the annual growth rate of banks credit expanding by 20.9 per cent compared to 34.1 per cent of the corresponding period 2019.
The Bank of Tanzania (BoT) monthly economic review March shows that lending to agriculture sector grew at a slower rate than other sectors namely building and construction as well as transport and communication.
The BoT accommodative monetary policy and measures to improve business environment have been playing key role in increasing commercial banks and other investors lending appetite to agriculture sector.
Further improvement is needed in order to increase agriculture sector lending that employs about 70 per cent of the country’s workforce and contributes at least 30 per cent of the Gross Domestic Product.
During the period under review, the composition of credit outstanding to agriculture expanded by 9.1 per cent compared to 9.3 per cent registered in the previous period.
During the reference period, banks credit to building and construction sectors was higher by 48.8 per cent compared to negative 7.7 per cent in the corresponding period 2019.
Banks’ credit to transport and communication grew by 16.3 per cent compared to 0.1 registers in the other period.
Also banks’ credit extended to personal declined by 13.6 per cent compared to 15.5 per cent of the corresponding period 2019.
The banks’ credit to manufacturing sector contracted to negative 3.7 per cent compared to 13 per cent in 2019.
Credit to the private sector continued to grow, recording an annual increase of 8 per cent extending 1.47tri/- to 19.9tri/- in the period under review.
The strong credit growth is the reflection of an increase in loanable funds linked with accommodative monetary policy and expansion of economic activities.
Domestic credit by banking system that includes credit to private sector and net credit to Central government grew by 5.8 per cent in the year ending February compared with 8.3 per cent in the corresponding period.
