Tanzania: New BoT policy should lower the cost of loans

Feb 19, 2013

A new policy recently introduced by the Bank of Tanzania should reduce the cost of borrowing in the country, according to Barclays Bank Tanzania Managing Director, Kihara Maina.

A new policy recently introduced by the Bank of Tanzania should reduce the cost of borrowing in the country, according to Barclays Bank Tanzania Managing Director, Kihara Maina.

Banks in the country will now be using the Bank of Tanzania (BoT) rate as the benchmark on pricing the costs of a loan, instead of using Treasury bills yield rates.

Kihara Maina said that the new policy was most welcome, as T-bills rates have been fluctuating with inflation, thus making loans more expensive, Tanzania Daily News reports.

This policy should further contribute to increasing the amount of credit issued to the private sector in Tanzania, which has continued to go up over the last year.

According to the BoT, a 16.1 per cent growth occurred during the 12 months prior to September 2012.ADNFCR-2976-ID-801542625-ADNFCR