Agriculture’s share of bank credit rises to 13.7pc

DODOMA: THE share of bank credit going to agriculture has risen from 8.1 per cent to 13.7 per cent, following measures by the Bank of Tanzania (BoT) to expand affordable credit to the private sector.

The increase reflects policy measures introduced by the central bank in 2021 to boost private-sector lending and lower borrowing costs, including a 1tri/- facility extended to banks and other financial institutions at an interest rate of three per cent a year for on-lending.

Speaking exclusively to the ‘Daily News’ and its sister publication, HabariLEO, during the 2026 National and International Nanenane Exhibition at the Dr John Samuel Malecela grounds in Nzuguni, Dodoma, BoT Economist Ms Cartas Chawene said banks were required to lend the funds to the private sector at interest rates not exceeding 10 per cent.

Ms Chawene said the measures had helped increase access to credit for agriculture, with the sector’s share of private-sector lending reaching 13.7 per cent by June 2026.

She urged farmers and other agricultural stakeholders to take advantage of affordable loans offered through commercial banks to expand production and other activities across the value chain.

“The loans cover the entire agricultural value chain, including input suppliers and enterprises involved in value addition,” she said.

Ms Chawene encouraged stakeholders to approach their respective commercial banks and apply for the low-interest agricultural loans.

Among the banks participating in the initiative are CRDB Bank, NMB Bank, TCB and the Tanzania Agricultural Development Bank (TADB).

“I take this opportunity to encourage agricultural stakeholders to visit these banks because the initiative is still active and it will also help them continue to benefit because the loans are offered at low interest rates,” Ms Chawene said.

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The BoT introduced the measures on July 27, 2021, as part of efforts to increase liquidity in banks, expand credit to the private sector and reduce lending rates.

The measures also included reducing the risk weight on loans, giving banks greater scope to extend credit to the private sector.

The interventions were introduced under the Bank of Tanzania Act, Cap. 197 and the National Payment Systems Act, Cap. 437, which provide the legal framework for the central bank to issue directives to banks, other financial institutions and mobile-money providers.

The measures followed a period when commercial-bank lending rates remained high at about 17 per cent despite monetary expansion and other interventions.

They were also part of efforts to cushion the economy from the impact of the Covid-19 pandemic and support recovery after economic growth slowed to 4.8 per cent in 2020, from seven per cent the previous year.