AfricaPress-Tanzania: PRIVATE sector credit increased by 1.47tri/-to 19.90tri/-in the period ending March this year which is equivalent to an annual growth rate of 8.0 percent.
According to the Bank of Tanzania (BoT) monthly economic review for March the credit growth was a reflection of an increase in loanable funds linked with accommodative monetary policy and expansion of economic activities.
The high growth of credit to the private sector was mostly absorbed by building and construction, agriculture, transport and communication and personal loans.
However, the credit extended to the private sector in the reference period was lower compared to the year ending January that grew by 9.1 percent.
Domestic credit grew by 5.8 percent in the year ending February 2020, compared with 8.3 percent in the corresponding period in 2019.
In terms of shares to total credit outstanding, personal loans and trade accounted for the largest share at 29.9 percent and 17.7 percent, respectively.
Personal loans are usually used by borrowers for financing small and medium-sized activities.
During the year ending February 2020, net foreign assets of the banking system recorded a year-on year growth rate of 11.5 percent, up from a contraction of 5.0 percent in February 2019.
The high growth was driven by improvement in the current account balance of the balance of payments, owing to cumulative impact of the increase in export proceeds from gold, manufactured goods, and tourism related activities.
Money supply growth was robust in February 2020, responding to accommodative monetary policy and credit growth to private sector.
The extended broad money supply grew by 9.9 percent in the year ending February 2020 compared with 4.0 percent in the corresponding period in 2019.
Likewise, broad money supply, which excludes foreign currency deposits in the measurement of money supply, grew by 10.3 percent compared with 6.0 percent in February 2019.
The shilling remained relative stable against the US dollar during the period under review trading at an average of 2,300/- per dollar. “On annual basis, the shilling depreciated by 0.1 per cent,” BoT said.
