AfricaPress-Tanzania: CREDIT extended to the private sector grew by 5.8 per cent in the year ending April down from 8.6 per cent and 10.6 per cent in the preceding month and corresponding month in 2019, respectively.
According to the Bank of Tanzania (BoT) monthly economic review, the slow pace of growth of private sector credit was on account of repayment of loans by some borrowers and a decrease in demand for loans by some sectors affected by Covid-19 pandemic.
Credit extended to the private sector by banks was mostly directed to building and construction, transport and communication and personal loans namely small and medium enterprises.
The annual growth of credit to building and construction grew by 38.1 per cent in the reference period compared to negative 4.7 in the corresponding period 2019.
The flow of credit to the transport and communication grew by 12 per cent during the period compared to 2.6 per cent in the year ending April 2019.
Personal loans and trade continued to account for the largest share of credit outstanding at 31.1 per cent and 17.6 per cent, respectively.
The annual credit extended to personal activities namely small and medium enterprises rose by 14.9 per cent during the year under review compared to 17.8 per cent in the corresponding period.
The total domestic credit by the banking system grew by 4.4 per cent year-on-year in April compared with 6.5 per cent in the preceding month.
In the period under review, the BoT continued to pursue accommodative monetary policy in order to support economic activities and limit the impact of Covid-19. As a result, growth of money supply remained high.
The extended broad money supply grew by 12.2 per cent in April, compared with 9.9 per cent in preceding month and 4.9 per cent in April 2019.
The broad money supply grew by 13.9 per cent compared with 10.8 per cent and 7.0 per cent in the preceding month and in April 2019, respectively.
Net foreign assets of the banking system grew by 22.1 per cent in the year ending April, higher than 17.5 per cent in the preceding month and a contraction of 10.7 per cent in the corresponding period in 2019.
This outturn was explained by cumulative build-up of foreign holdings by the Central Bank through purchase of foreign exchange from the government and banks.
