Tanzania’s private sector has experienced robust growth in credit extension, driven by improved business conditions and supportive fiscal and monetary policies, as the Bank of Tanzania (BoT) reported in its Monthly Economic Review for June 2023.

In May 2023, private sector credit exhibited a significant year-on-year growth of 22.5%, compared to 15% in the same period last year. Among the various economic activities, credit to the agricultural sector registered the highest growth at 40.9%, closely followed by the transport and communication sectors.

The report highlights that loans extended to personal undertakings, particularly small and medium enterprises, contributed significantly to the credit expansion, followed by trade, manufacturing, and agricultural activities. Personal loans constituted a substantial portion of the overall credit, with trade and manufacturing activities also playing a notable role.

Regarding interest rates, the rates charged by banks on loans and offered on deposits remained relatively stable in May 2023 compared to the previous month. The average lending rates stood at 15.96%, slightly up from 15.91% in April 2023. Negotiated lending rates experienced a decline, averaging 13.02% compared to 13.65% in the preceding month.

On the deposit side, time deposit rates averaged 6.91%, a slight increase from 6.79% in the previous month. Negotiated deposit rates averaged 9.24%, showing a decline from 9.46% in the preceding month, as indicated by the report.