LENDING to the private sector registered a positive growth in June this year after increasing by 2.03tri/-, compared to an increment of 1.38tri/- in the corresponding period 2013.
According to the Bank of Tanzania (BoT) monthly economic review for July, credit to the private sector represents an annual growth rate of 21.4 per cent, higher than 17.1 per cent recorded in the year ending June 2013.
Comparatively, the credit growth in the month under review was higher than the year ending May 2014 that grew 18 per cent, slightly lower than 18.7 per cent recorded in the similar period in 2013.
In the period, credit to major economic activities recorded positive growth rates with most of the credit extended to trade, manufacturing, personal, hotels and restaurants and transport and communication activities.
On annual basis, building and construction grew by 26 per cent compared to 23.7 per cent of the previous month, agriculture 11.2 per cent compared to 4.9 per cent in May, trade 18.9 per cent compared to 14 per cent in May, transport and Communication 29.3 per cent compared to 24 per cent in May.
The share of the total outstanding private sector credit remained fairly stable with trade and personal activities taking the lion share.
During the year ended June 2014, extended broad money supply (M3) increased by 2.41bn/- translating into a growth rate of 15.8 per cent compared with 14.9 per cent recorded in the year ending June 2013. The increase in money supply was largely driven by increase in credit to the private sector and Net Foreign Assets (NFA) of the banking system.
The NFA of the banking system increased by 556.5bn/- compared with 186bn/-recorded in the year ending June 2013. In the year ended May, the extended broad money supply slowed down to 13.8 per cent compared with 16.1 per cent registered in the corresponding period 2013, mainly due to decline in net foreign assets (NFA) of the banking system, particularly those of the central bank.
This development was mainly explained by the decline in external non concessional borrowing and increase in government foreign obligations relative to the corresponding period of 2013.