Access to credit still a challenge, says Mwigulu Nchemba

Finance and Planning minister, Mwigulu Nchemba.

By Josephine Christopher

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Dar es Salaam. The Finance and Planning minister, Mwigulu Nchemba, has on Thursday, November 11, said that regardless of the major development made in the

banking sector for the past 60 years, access to credit facilities is still a challenge.
Speaking during a press briefing for the 60 years of Independence the minister said recently financial services has been widespread with presence of physical branches, agency banking, and mobile banking even in remote areas.
“However, more efforts are needed on facilitating credit access, especially to the productive sectors of the economy,” he said.
According to Bank of Tanzania (BoT) nearly 20 percent of credit from commercial banks that was extended to the private sector went to personal loans.
“Personal loans continued to account for the largest share of credit extended to the private sector, followed by trade, manufacturing and agriculture,” BoT stated in part.
The minister said, “The government plans to transform the sector and make sure more loans are extended to the other sectors, which would eventually translate into economic growth by multiplier effect.”
In September 2021, BoT stated that private sector credit annual growth slightly improved to 4.6 percent, up from 3.2 percent in the preceding month.
The improvement according to the central bank is the result of the measures rolled out by BoT in July 2021 and the recovery of the economy from the Covid-19 pandemic.
The interest rates charged on loans remained the same in September at 17 percent, says BoT.
On which the minister said the government would continue to implement policy measures that would influence the decrease in the cost of lending.