Domestic credit extended to the private sector and the central government, grew at an annual rate of 10.6 per cent this year compared with 6.5 per cent in the quarter ending March last year.
According to the Bank of Tanzania (BoT) monthly economic report, credit extended by banks to the government through the purchase of government securities, grew at an annual rate of 8.7 per cent at the end of the quarter ending March this year which is within the borrowing limit set in the 2020/21 government budget.
Meanwhile, private sector credit increased by 465.0bn/-, equivalent to annual growth of 2.3 per cent compared to 8.6 per cent recorded in March last year.
The subdued growth of credit to the private sector was attributable to the adverse impact of Covid-19, which disrupted demand and supply channels of some economic activities, particularly those directly exposed to the external sector.
Economic activities that recorded positive credit growth include personal activities, representing lending by banks to micro, small and medium enterprises; followed by hotels and restaurants; and transport and communication.
In terms of share, personal loan-related activities accounted for the largest share of the total outstanding credit, followed by trade, manufacturing, and agriculture activities.
The central bank continued to implement an accommodative monetary policy during the quarter ending March this year in support of economic activity through bank lending to the private sector.
The extended broad money supply increased to 30.15tri/-from 28.24tri in March 2020, equivalent to annual growth of 6.8 per cent.
Meanwhile, the broad money supply grew at an annual rate of 9.3 per cent to 22.99tri/-from 21.03tri/-in the quarter ending March last year.