AfricaPress-Tanzania: THE domestic credit by the banking system recorded an annual growth of 17.8 per cent in December last year in comparison to 7.1 per cent in December the year before and manifested in both credit to private sector and central government.
According to the Bank of Tanzania (BoT) Economic Bulletin for the quarter ending December last year, the credit extended to the central government was through auctions of government securities.
Private sector credit maintained a positive growth, increasing by 596bn/-, equivalent to an annual growth of 3.0 per cent, compared to 11.1 per cent recorded in the corresponding period in 2019.
The subdued growth of credit to private sector was partly attributable to the global effect of Covid-19 that affected some activities, particularly tourism-related business.
The growth of credit to private sector was more pronounced in personal activities, which is often used for micro, small and medium enterprises; transport and communication, and mining and quarrying.
The personal loan-related activities accounted for the largest share of the total outstanding credit, trailed by trade, manufacturing, and agriculture activities, which accounted for 34.3 per cent, 15.4 per cent, 9.5 per cent, and 8.7 per cent of the total, respectively.
During the quarter ending December 2020, money supply growth moved in tandem with accommodative monetary policy, despite adverse effects on the challenges caused by Covid-19.
The extended broad money supply grew by 5.7 per cent to 29.91tri/-from TZS 28.31tri/-in December 2019. The broad money grew at an annual rate of 8.2 per cent to 23.01tri/- from 21.28tri/-.
