Personal loans accounted for 34.1 per cent of bank credit to selected economic activities in the year ending August, according to the Bank of Tanzania's Monthly Economic Review. Private-sector credit expanded 33 per cent annually to 55.23 trillion shillings in August, compared with 41.53 trillion shillings in the same month of the previous year, reflecting continued demand for financing from households and businesses across Tanzania's economy.
Trade secured the second-largest share of credit at 15.8 per cent, followed by agriculture at 13.8 per cent, demonstrating the significance of these commercial and agricultural sectors within banks' lending portfolios. Manufacturing accounted for 7.4 per cent of credit, transport and communication for 6.0 per cent, and other services for 4.8 per cent. The Bank of Tanzania's breakdown shows how financial resources are distributed across different economic activities.
Credit growth rates varied significantly across sectors, with some industries expanding much faster than others. Personal loans recorded annual growth of 24.9 per cent in August, below the overall private-sector rate. Trade credit grew 47.1 per cent annually, while agriculture expanded 38.4 per cent. Transport and communication showed the strongest growth at 77.2 per cent annually, followed by mining and quarrying at 75.9 per cent. Building and construction credit grew 41.8 per cent, while manufacturing recorded the slowest growth at 12.9 per cent.
The overall lending rate eased slightly to 15.05 per cent in August from 15.10 per cent in July, according to the Bank of Tanzania's data. This marginal decline potentially offers modest relief to borrowers seeking financing for business expansion and investment. The Bank of Tanzania noted that credit allocation across sectors is an important indicator of how banks distribute financial resources, and that increased lending to productive sectors can help businesses expand operations, improve production capacity and create employment opportunities.
For savers and borrowers in Tanzania, the slowdown in lending rate combined with strong credit growth signals increased availability of financing, though personal loans continue to absorb the largest share of bank credit despite faster growth in trade and agricultural lending.