Tanzania sees decline in credits to the private sector

Aug 15, 2016

The banking sector has also experienced a reduction in non-performing loans.

The growth of credit to the private sector in Tanzania has slowed down to 16.2 per cent in May from 19.3 per cent in April and 23.6 per cent in March, according to figures from the
Bank of Tanzania (BoT).

A senior lecturer at the University of Dar es Salaam, Prof Haji Semboja,
told Tanzania Daily News that the government crackdown on corruption and shifting its funds from commercial banks to the BoT has impacted greatly on the liquidity level in the circulation and lenders' capacity to issue loans.

"This is a necessary move taken by the government to instil discipline in the use of public funds. What is currently observed is the lack of cheap money in the circulation as it was before," he said.

On the other hand, the Tanzanian banking sector has experienced a reduction in non-performing loans (NPLs) thanks to the increasing use of credit bureaus.

Most banks maintained NPL levels below five per cent, the Bank of Tanzania said.

The BoT report also showed that credit extended to trade activities and personal loans continued to account for the largest share of total outstanding credit (38.4 percent), followed by manufacturing (10.6 percent) and agriculture (7.9 percent).ADNFCR-2976-ID-801823478-ADNFCR