THE annual growth rate of banks credit to agriculture sector has expanded by 87.2 per cent in the year ending October compared to negative growth of 14.5 per cent in the corresponding period 2018, on account of accommodative monetary policy and measures to improve business environment.<\/p>\n
According to the Bank of Tanzania (BoT) monthly economic review November shows that the agriculture sector credit increased at a faster rate, followed by building and construction and mining and quarrying.<\/p>\n
This is a big boost for the agriculture sector that was previously regarded by most commercial lenders as a high risk business to lend, thus leaving it financially underserved.<\/p>\n
The increased lending will bring about huge impact to the agriculture sector that employs about 70 per cent of the country\u2019s workforce and contributes about 30 per cent of the Gross Domestic Product.<\/p>\n
According to analysts, lending institutions should find ways to de-risk agricultural finance by addressing both individual risks as well as important systemic risks.<\/p>\n
Individual risks are often linked to credit risk assessment and information and systems to help. During the reference period, the composition of credit outstanding to agriculture increased by 9.4 per cent compared to 9.0 per cent of the corresponding period 2018.<\/p>\n
Other sectors that registered high annual growth rate of banks credit apart from agriculture are building and construction 63.7 per cent compared to negative 17.8 per cent of the corresponding period 2018. Banks\u2019 credit to mining and quarrying grew by 45.5 per cent in the period under review compared to 16 per cent in the corresponding period.<\/p>\n
Also banks\u2019 credit extended to personal and manufacturing sectors declined by 13.7 per cent and 3.3 per cent compared to 56.9 per cent and 6.5 per cent of the corresponding period, respectively.<\/p>\n
Credit to the private sector continued to expand somewhat strongly, by 9.8 per cent in October 2019 compared with 9.3 per cent and 4.8 per cent in the year ending September 2019 and October 2018, respectively.<\/p>\n
Credit to the central government by the banking system (central bank and banks) grew by 3.4 per cent in the year ending October 2019 compared with 14.8 per cent in October 2018, owing to build-up of government deposits at the BoT.<\/p>\n","protected":false},"excerpt":{"rendered":"
THE annual growth rate of banks credit to agriculture sector has expanded by 87.2 per cent in the year ending October compared to negative growth of 14.5 per cent in the corresponding period 2018, on account of accommodative monetary policy and measures to improve business environment. According to the Bank of Tanzania (BoT) monthly economic […]<\/p>\n","protected":false},"author":84,"featured_media":1199,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[274],"class_list":["post-1198","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-bot"],"yoast_head":"\n