Tanzania: Credit Reference Database Improves Lending Rates
Measures taken to improve borrowers' credit information using credit reference database has led to the decline of the overall lending rates and opportunity for more people to access loans.
The Bank of Tanzania (BoT) monthly economic review for October shows the overall lending rate eased to an average of 17.14 per cent from 17.68 per cent in the corresponding period last year. Also, the easing of lending rates was partly a reflection of the BoT accommodative monetary policy stance.
During the period under review however, the annual growth rates of banks' credit to major economic activities declined with the exception of the manufacturing sector that made slight increase to 6.5 per cent in the year ended October compared to 6.2 per cent in the year ended September. According to the report, banks' credit to personal activities declined to 56.9 per cent in the year to October compared to the growth of 60.1 per cent in the year to September.
The banks' credit to building and construction registered negative growth of 17.8 per cent in the year ended October compared to the negative growth of 20.2 per cent in the year ended September. Similarly, banks' credit to agriculture sector that employs over 70 per cent of the country's workforce recorded negative growth of 14.5 per cent compared to the negative growth of 9.7 per cent in the preceding period.
The growth of banks' credit to transport and communication activities was negative 3.1 per cent compared to 0.3 per cent in the previous period. Mining and quarrying activities attracted banks' credit growth of 16 per cent in the year to October compared to 34.9 per cent in the year ended September. The overall time deposits rate averaged at 7.82 percent in the period under review compared with 9.77 percent in the corresponding period last year.
Source: All Africa