Domestic credit records annual increase of 2.4trn/-

Domestic credit records annual increase of 2.4trn/-

According to the Central Bank (BoT) monthly economic review for March this year, annual growth of credit to the private sector was 24.3 per cent, slightly higher than 24 per cent recorded in February 2011. "Strong growth was recorded in building and construction as well as trade activities. However, credit to agriculture decreased following repayment by corporate clients," stated the report.

Other sectors which recorded slow growth are manufacturing, transport and communication, hotels and restaurants; and personal activities. About 40 per cent of total outstanding private sector credit are concentrated in personal and trade activities.

Net credit to the government increased by 876.2bn/- in the year to February 2012, compared with 790.2bn/- recorded in the corresponding period of the previous period. About 89 per cent was from the Bank, compared with 42.6 per cent posted in a similar period of 2011.

The development, according to the Bank report was associated with delays in foreign programme assistance which necessitated recourse for short term government financing from the Bank. In the meantime, Net Domestic Assets (NDA) of the banking system surged by 1.79tr/-, compared to 1.20tr/- recorded in the similar period in the year earlier, mainly on account of rising credit to the private sector and the government.

Contribution of NDA to annual change in extended broad money consisting foreign currency deposits of the residents with depository corporations rose to 98.4 per cent from 55.3 per cent, with private sector credit contributing a lion's share.

Meanwhile, the average interest rates charged on loans issued to the prime borrowers was relatively low at 13.72 per cent, which was a decline from 13.76 per cent recorded in the preceding year. Average interest rates on domestic currency denominated deposits followed the same pattern rising to 6.5 per cent from 5.9 per cent.

In the meantime, average interest rate to prime customers was set at 8.6 per cent, almost the same as core inflation. Average cost of funds as measured by the spread between short-term lending and one year time deposit rates narrowed to 5.9 percentage points in the year ending February 2012, compared with 6.5 percentage points recorded in the period earlier.

Despite the inflationary pressure and rising money market rates, overall average interest rate on domestic currency denominated loans rose marginally to 15.01 per cent from 14.6 per cent recorded in the year ending February 2011.

French firms unveil 9.7tri/-  investments plan for TZ

FRENCH private and public investment commitments in Tanzania over ...


Post your comments



Recent Posts


more headlines in our related posts

latest # news