Private sector credit recorded an annual growth of 23.1 percent in January 2023, compared with 10 percent in January 2022 on account of supportive monetary and fiscal policies, and ongoing recovery of economic activities from adverse effects of global shocks.

According to the Bank of Tanzania (BoT) Monthly Economic Review for January, 2023, credit to the agriculture sector continued to record the highest growth rate, attributable to monetary policy measures rolled out by the Bank in July 2021 to promote cost-effective credit intermediation .

“The contribution of personal loans—which accounted for the largest share in the outstanding credit to private sector and to the overall growth of credit to the private sector remained dominant though slowing, relative to credit in favour of agriculture, building and construction, and transport and communication activities,” the report says.

Meanwhile, Interest rates charged by banks on loans recorded a marginal increase in January 2023 compared to rates registered in the preceding month and corresponding month in 2022.

Despite the increase, the overall lending rate remained virtually unchanged at around 16 percent, while negotiated lending rates averaged at 14.19 percent, higher than 13.29 percent and 13.68 percent in the preceding month and corresponding month in 2022, respectively.

“On average, deposit rates recorded increases with the overall deposit rate rising to 7.38 percent from 6.94 percent in the preceding month, and 6.79 percent in January 2022,” the report says

Negotiated deposit rates averaged 9.30 percent in January 2023, slightly above 8.88 percent in the preceding month, but lower than 9.92 percent in January 2022.