THE growth of private sector credit went up to 11.9 per cent in the year ending February compared with 2.5 per cent in February last year attributable to improving business conditions from adverse effects of Covid-19, coupled with supportive monetary and fiscal policies.
According to the Bank of Tanzania (BoT) monthly economic review for March, much of the growth was absorbed by mining, micro, small and medium enterprises as personal loans, trade and manufacturing activities.
Credit extended to the private sector and central government by the banking system, grew by 24.5 per cent in the year ending February this year compared with 6.9 per cent in February last year.
Personal loans accounted for the largest share of outstanding private sector credit, followed by trade, manufacturing and agriculture.
In the period under review, mining and quarrying attracted the highest credit than any other sector after posting a 25.1 per cent increase compared to 1.0 per cent in the same period last year and 10.9 per cent in the preceding month.
The personal loan increased by 24.3 per cent compared to 22.1 per cent of the corresponding period last year but slightly down by 24.6 per cent of the previous month.
The credit extended to trade activities rose by 18.3 per compared to a negative 11.4 per cent in the corresponding period last year and slightly down to 19.5 per cent in the previous month.
The credit to the manufacturing sector increased to 17.4 per cent in the reference period compared to a negative 4.9 per cent in the same period last year and 6.8 per cent registered in the preceding month.
Lending to agriculture activities was positive in the year ending February after recording 2.2 per cent compared to a negative 7.1 per cent in the corresponding period last year and a negative 4.8 per cent in the previous month.
Money supply growth was strong in February this year responding to accommodative monetary policy and private sector credit growth and is expected to be consistent with the target growth of 10 per cent for 2021/22.
The extended broad money supply (M3) grew by 17 per cent compared with 4.9 per cent in February last year.