Credit extended to the private sector by commercial banks grew at annual rate of 24.7 per cent in the year ended September this year, compared with 20.7 per cent in the corresponding period in 2014.
The increase in commercial banks' lending to the private sector could be explained by the slowed down of the growth of net government borrowing from the banking system during the period under review.
According to Bank of Tanzania (BoT) monthly economic review for September shows that the growth of net government borrowing from the banking system fell to 9.0 per cent from 71.3 per cent in September of the previous year.
A large part of the decrease was reflected in the holding of government securities by banks. The BoT report shows further that credit to major economic activities experienced positive growth, with the highest growth recorded in transport and communication.
The share of credit to major economic activities remained almost the same in the period under review as in the corresponding period in 2014. The trade activities accounted for the largest share of 21.6 per cent, followed by personal loans and manufacturing activities with 17.1 per cent and 11.5 per cent, respectively.
Extended broad money supply grew by 16.5 per cent in the year ending September 2015 compared with 14.7 per cent in the corresponding period in 2014. The increase was underpinned by net foreign assets of the banking system and credit to the private sector.
Net foreign assets of the banking system grew by 33.9 per cent compared with a contraction of 4.8 per cent in the year ending September 2014.
The increase in commercial banks' lending to the private sector could be explained by the slowed down of the growth of net government borrowing from the banking system during the period under review.
According to Bank of Tanzania (BoT) monthly economic review for September shows that the growth of net government borrowing from the banking system fell to 9.0 per cent from 71.3 per cent in September of the previous year.
A large part of the decrease was reflected in the holding of government securities by banks. The BoT report shows further that credit to major economic activities experienced positive growth, with the highest growth recorded in transport and communication.
The share of credit to major economic activities remained almost the same in the period under review as in the corresponding period in 2014. The trade activities accounted for the largest share of 21.6 per cent, followed by personal loans and manufacturing activities with 17.1 per cent and 11.5 per cent, respectively.
Extended broad money supply grew by 16.5 per cent in the year ending September 2015 compared with 14.7 per cent in the corresponding period in 2014. The increase was underpinned by net foreign assets of the banking system and credit to the private sector.
Net foreign assets of the banking system grew by 33.9 per cent compared with a contraction of 4.8 per cent in the year ending September 2014.
The significant growth was largely on account of valuation gains resulting from depreciation of the shilling against the US dollar and increase in deposits of banks abroad.
Source: Daily News, reported from Dar es Salaam, Tanzania
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