Tanzania: Banks' Lending Interest Rate Falls to 16pc in February

BANKS credits continue to become more affordable as interest rates maintained a steady decline, thanks to Central Bank measures to improve efficiency in the banking sector.

The average commercial banks year-on-year loan interest has gone down by 0.62 per cent to 16.38 per cent recorded at the end of February, the Minister for Finance and Planning Dr Phillip Mpango said.

He said over the weekend the declining of interest rate demonstrates good measure the government undertakes to strengthen the banking sector.

"The government has been taking several measures to spur the growth of the finance sector.

The measures undertaken during the past few months, have helped to improve liquidity in the banking sector," Dr Mpango said in a speech that was read on his behalf by TRA Commissioner General, Charles Kichere during CRDB Bank shareholders seminar.

Dr Mpango said growth in CRDB Bank's profit during the first quarter was testament to the positive steps being taken by the government. He further said loans extended to government and private sector also by local lenders grew by 7.3 per cent in February.

He also said the private sector loan increased by 8.0 per cent since last May to this February. Measures taken to lower non-performing loans (NPLs) demonstrated a decreasing trend leading lenders to increase profit margins generated in the last consecutive two quarters, he said.

"The reduction of the NPLs was the results of the on-going government efforts to improve financial sector business environment and good measures undertaken by banks to control them," Dr Mpango said.

The Treasury Chief said application of the technology on issuing and repaying loans also assisted to control and reduced NPLs.

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