The Guardian Reporter
The Guardian
- • The overall lending rate declined to 16.28 per cent in January 2016 from 16.39 per cent in December 2015, but the rate was higher than 15.69 per cent in January 2015
The local banking industry loan portfolio hit
20.4trn/- in January this year, which was an increase of 22.1 per cent
from what it was during the corresponding period in 2015, new data from
the central bank shows.
The
loans extended by banks during the year ending last January amounted to
3.7trn/- most of which went to traders, individual borrowers and
manufacturers.
According to Bank of Tanzania (BoT) figures, the outstanding stock of domestic claims by the banking system in January 2015 was about 16.7trn/-.
In January 2016 alone, the banks loaned borrowers 34.2bn/-. The loan portfolio was 20.37trn/- in December. The total credit extended in the whole of last year was 3.66trn/-.
“Trade, personal and manufacturing activities continued to account for the largest shares of banks’ credit to the private sector. In January 2016, these activities accounted for about 49.1 per cent of the loans extended to the private sector,” BoT notes in the February monthly economic review (MER).
That amounts to nearly 17bn/-.
BoT says that private sector credit by banks recorded a strong performance, growing at an annual rate of 25.1 per cent in January 2016, compared with 19.1 per cent in January 2015.
The sturdy growth mirrored expanding economic activities, supported by moderation in credit to the government. During the period, net credit to the government grew by 12.4 per cent compared with 52.5 per cent in January 2015.
“The slowdown in net credit to the government was mostly reflected in the contraction of banks’ holding of government securities,” BoT notes in the MER, which was released late last week.
“Specifically, banks’ lending to the government through purchase of government debt securities contracted by 8.7 per cent in the year ending January 2016, mainly due to under-performance of Treasury bonds auctions and sizable redemption of Treasury bills,” the MER reads.
Loans to the private sector totalled 15.76trn/- in January compared to the outstanding stocks of 15.49trn/- and 12.57trn/- in December and January 2015 respectively.
Credit to the government went down by 238.6bn/- to 4.64trn/- from the 4.88trn/- it was in December. The net claims on the central government amounted to 4.13trn/- in January 2015.
The banks’ lending to the government through Treasury bills and bonds was about 3.85trn/- in January compared to 3.73trn/- in December and 4.21trn/- in January 2015.
“The strong growth of private sector credit was more pronounced for personal loans, transport and communication, manufacturing and agriculture activities,” notes the central bank,” it adds.
The annual growth of banks credit to individual borrowers was 32.9 per cent this January compared to 29.8 per cent the previous month and 22.3 per cent in January last year.
The growth rate for transport and communication was 33 per cent, 33 per cent and 31.7 per cent during the three months respectively. For manufacturers, the credit grew by 22.9 per cent, 22.3 per cent and 22.4 per cent respectively.
Credit to farmers, which was negative 1.3 per cent in January 2015, saw big improvement with a growth rate of 22.1 per cent this January. Credit to the sector grew by 11.1 per cent last December.
Growth of credit to traders was the worst at 9.5 per cent in January 2016 compared to 25.9 per cent in the corresponding period last year. Credit to the manufacturers grew by 16 per cent in December.
“Trade, personal and manufacturing activities continued to account for the largest shares of banks’ credit to the private sector. In January 2016, these activities accounted for about 49.1 percent of the loans extended to the private sector.”
Traders’ share of the credit extended by the banks in January was 18.6 per cent whereas individual borrowers had 18.6 per cent and manufacturers 11.4 per cent. The shares for the three borrowers in January 2015 were 21.8 per cent, 17.5 per cent and 11.6 per cent respectively.
In January 2016, the overall deposit rate (average interest rate on deposits of various maturity spectrum) fell to 9.08 per cent from 9.30 per cent in December 2015. In January 2015, the rate was 9.02 per cent.
Similarly, interest rate on 12-month deposits declined to 11.01 per cent from 11.16 per cent, but was higher than 10.76 per cent in January 2015.
“On the lending side, the overall lending rate declined to 16.28 percent from 16.39 percent in December 2015, but the rate was higher than 15.69 per cent in January 2015,” BoT said.
“Meanwhile, one-year lending rate decreased to 14.19 percent from 14.22 percent in December 2015. As a result of these developments, the interest rate spread between 12-month deposit and lending rates widened, though slightly, to 3.33 percentage points in January 2016 from 3.06 percentage points in the preceding month,” the central bank notes.
According to Bank of Tanzania (BoT) figures, the outstanding stock of domestic claims by the banking system in January 2015 was about 16.7trn/-.
In January 2016 alone, the banks loaned borrowers 34.2bn/-. The loan portfolio was 20.37trn/- in December. The total credit extended in the whole of last year was 3.66trn/-.
“Trade, personal and manufacturing activities continued to account for the largest shares of banks’ credit to the private sector. In January 2016, these activities accounted for about 49.1 per cent of the loans extended to the private sector,” BoT notes in the February monthly economic review (MER).
That amounts to nearly 17bn/-.
BoT says that private sector credit by banks recorded a strong performance, growing at an annual rate of 25.1 per cent in January 2016, compared with 19.1 per cent in January 2015.
The sturdy growth mirrored expanding economic activities, supported by moderation in credit to the government. During the period, net credit to the government grew by 12.4 per cent compared with 52.5 per cent in January 2015.
“The slowdown in net credit to the government was mostly reflected in the contraction of banks’ holding of government securities,” BoT notes in the MER, which was released late last week.
“Specifically, banks’ lending to the government through purchase of government debt securities contracted by 8.7 per cent in the year ending January 2016, mainly due to under-performance of Treasury bonds auctions and sizable redemption of Treasury bills,” the MER reads.
Loans to the private sector totalled 15.76trn/- in January compared to the outstanding stocks of 15.49trn/- and 12.57trn/- in December and January 2015 respectively.
Credit to the government went down by 238.6bn/- to 4.64trn/- from the 4.88trn/- it was in December. The net claims on the central government amounted to 4.13trn/- in January 2015.
The banks’ lending to the government through Treasury bills and bonds was about 3.85trn/- in January compared to 3.73trn/- in December and 4.21trn/- in January 2015.
“The strong growth of private sector credit was more pronounced for personal loans, transport and communication, manufacturing and agriculture activities,” notes the central bank,” it adds.
The annual growth of banks credit to individual borrowers was 32.9 per cent this January compared to 29.8 per cent the previous month and 22.3 per cent in January last year.
The growth rate for transport and communication was 33 per cent, 33 per cent and 31.7 per cent during the three months respectively. For manufacturers, the credit grew by 22.9 per cent, 22.3 per cent and 22.4 per cent respectively.
Credit to farmers, which was negative 1.3 per cent in January 2015, saw big improvement with a growth rate of 22.1 per cent this January. Credit to the sector grew by 11.1 per cent last December.
Growth of credit to traders was the worst at 9.5 per cent in January 2016 compared to 25.9 per cent in the corresponding period last year. Credit to the manufacturers grew by 16 per cent in December.
“Trade, personal and manufacturing activities continued to account for the largest shares of banks’ credit to the private sector. In January 2016, these activities accounted for about 49.1 percent of the loans extended to the private sector.”
Traders’ share of the credit extended by the banks in January was 18.6 per cent whereas individual borrowers had 18.6 per cent and manufacturers 11.4 per cent. The shares for the three borrowers in January 2015 were 21.8 per cent, 17.5 per cent and 11.6 per cent respectively.
In January 2016, the overall deposit rate (average interest rate on deposits of various maturity spectrum) fell to 9.08 per cent from 9.30 per cent in December 2015. In January 2015, the rate was 9.02 per cent.
Similarly, interest rate on 12-month deposits declined to 11.01 per cent from 11.16 per cent, but was higher than 10.76 per cent in January 2015.
“On the lending side, the overall lending rate declined to 16.28 percent from 16.39 percent in December 2015, but the rate was higher than 15.69 per cent in January 2015,” BoT said.
“Meanwhile, one-year lending rate decreased to 14.19 percent from 14.22 percent in December 2015. As a result of these developments, the interest rate spread between 12-month deposit and lending rates widened, though slightly, to 3.33 percentage points in January 2016 from 3.06 percentage points in the preceding month,” the central bank notes.
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