Credit growth to the agricultural sector picked up to 7.6 per cent in June, this year, from 6 per cent recorded in the preceding month.
The Bank of Tanzania (BoT) monthly economic review for July also shows that the percentage growth of credit to agriculture increased to 8.6 per cent from 8.5 per cent in May this year.
The agricultural sector received a huge boost last week after the government opened a new agriculture development bank (TADB).
That will play crucial role in financing the agriculture production chain particularly key infrastructure like irrigation. According to the BoT report, the annual growth bank’s credit to most of the selected economic activities slowed down in June 2015, with exception of personal, transport and communication, and trade activities.
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The share of total outstanding credit, trade and personal loans continued to dominate, accounting for 21.2 percent and 17.2 per cent, respectively. However, credit to the private sector remained strong, growing at above 20 per cent in the year ending June 2015.
In the period under review, the annual growth of extended broad money (M3) was 13.2 percent compared with 15.8 percent in June 2014 and 15 percent in May 2015.
The slowdown in growth of M3 was attributed to a decline in the growth of Net Domestic Assets (NDA) of the banking system.
Annual growth of NDA of the banking system slowed down to 9.7 percent from 20.6 percent in the preceding year, largely reflecting the decline in net government borrowing from the banking system.
The net government borrowing decreased to 500.9bn/- in the year ending June 2015 from 955.5bn/- in the year ending June 2014. \
Net Foreign Assets (NFA) of the banking system recorded an increase of 1.28tri/- compared with 556.6bn/- in the corresponding period in 2014 and 776bn/-in the preceding month, following valuation gains resulting from the depreciation of the shilling.
Source Tanzania Daily News
