TOTAL domestic credit to the private sector and central government by the banking system grew by 6.9 per cent in the year ending March compared with 1.1 per cent in the corresponding period last year, driven by the ongoing recovery in growth of credit to the private sector.
According to the Bank of Tanzania (BoT) monthly economic review for March this year credit extended by banks to the private sector grew significantly by 9.6 per cent in the year ending March compared with 1.2 per cent in the corresponding period of last year.
The outturn was because of sustained accommodative monetary policy stance and measures taken by banks to reduce the amount of nonperforming loans, including mandatory use of credit reference system before loan approval.
Sectoral composition of stock of credit extended by banks to the private sector remained almost the same as in the previous month and corresponding month of 2018.
Personal loans, often used to finance small and medium-size business, and credit to trade activities accounted for the largest share of the outstanding credit, holding 28.6 per cent and 18.2 per cent in March, respectively.