CREDIT to the private sector registered an annual increase of 8.9 per cent in November last year compared with 5.0 per cent in the corresponding period 2018, supported by accommodative monetary policy and ongoing measures to improve business environment.
According to the Bank of Tanzania (BoT) monthly economic review for December, credit extended to all major economic activities continued to record growth, with exception of hotels and restaurants.
Regarding share in the outstanding credit, personal related activities and trade were dominant, accounted for 29.9 per cent and 17.8 per cent at the end of November 2019.
Domestic credit by banking system that includes credit to private sector and net credit to the Central government grew by 4.2 per cent in the year ending November 2019 compared with 8.7 per cent and 9.5 per cent in the year ending October 2019 and corresponding period in 2018, respectively.
This outturn was due to a decline in banking system’s net claims to the Central government owing to buildup of government deposits at the BoT.
The annual growth of extended broad money supply remained robust after registering 10.5 per cent growth in the year ending November 2019 compared with 3.2 per cent the year ending November 2018.
This was driven by expansion in net foreign assets of the banking system and continued strong growth of credit to the private sector.
The broad money supply that excludes foreign currency deposits also recorded strong annual growth of 11.5 per cent in November 2019 compared with 3.6 per cent in the corresponding period of 2018.
Net foreign assets of the banking system recorded an annual growth of 7.6 per cent compared to a contraction of 2.7 per cent in November 2018.
This was mainly on account of increase in foreign exchange export proceeds from tourism, cash crops, gold and manufactured goods.
