In the backdrop of Tanzania’s Central Bank announcing a stimulus package for commercial banks, loans advanced by banks have shot up significantly over the last year and the stimulus package is expected to sustain if not increase lending.
The Central Bank, the Bank of Tanzania (BoT) has this week released its Consolidated Zonal Economic Performance Report which shows lending by commercial banks have increased considerably in the last year.
The report shows that the highest amount of growth in bank loans was parallel to ongoing national infrastructure development works. The highest increase in loans was to companies operating in the central and south eastern zones owing to increased construction projects and to trading activities, respectively.
This would explain reduced lending in the commercial capital of Dar es Salaam. Lending in the bustling port city actually fell 1.6 percent compared to the same period last year. However, despite the percentage decrease, lending in Dar es Salaam still represented 54 percent of all lending in the given period.
Other areas where lending fell even worse than Dar es Salaam are the northern zones which suffered a 5.2 percent decrease compared to last year and contributed only 17.2 percent of total lending.
On the upside, loans issued in the southern eastern zones buoyed 5.8 percent owing to trading activities there.
Similarly, lending in the lake zones increased 15.7 percent representing 10.5 percent of total national lending while the largest increase is reported in the central zones which enjoyed a whopping 33.2 percent increase in lending but was still represented a minimal 7.6 percent of the total national loans.
Overall, 52.4 percent of the total loans issued went to personal, wholesale and retail trading activities related mostly to construction activities as the real estate sector maintains its boom.
On the deposit side of things, the overall amount of deposits in commercial banks increased by an impressive 17.4 per cent clocking USD 82.9 million.
The largest share contribution in deposits was again from the port and commercial capital of Dar es Salaam which represented 62.8 percent of all the loans.
Source: The Exchange