Dar es Salaam. Tanzania closed 2025 on a strong financial footing as commercial banks sharply expanded credit to the private sector, signalling improved liquidity conditions and sustained economic momentum, according to the Bank of Tanzania’s (BoT) January 2026 Monthly Economic Review.
The report shows that the stock of private sector credit reached TZS 44.6 trillion in December 2025, translating into an annual growth rate of 23.5 percent, a notable acceleration from 18.1 percent recorded in November 2025.
This credit surge fed directly into broader money supply growth. Broad money (M3) expanded by 25.8 percent in the year ending December 2025, reflecting an increase in currency in circulation as well as higher balances in bank accounts, fixed deposits and savings.
BoT attributes this performance to improved liquidity in the banking system, supported by an accommodative monetary policy stance and active liquidity management operations, including reverse repurchase (repo) auctions.
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Beneath the headline figures, sectoral data point to a broad-based expansion in lending, led by mining and quarrying, which posted a striking 91.1 percent growth as investment activity strengthened alongside favourable global commodity prices. Credit to trade followed with a 49.7 percent increase, while lending to agriculture rose by 28.9 percent, signalling growing support for commercial farming and agribusiness value chains.
Momentum also carried into transport and communication, where credit grew by 29.4 percent, and building and construction, which expanded by 25.6 percent. Personal loans increased by 17.7 percent, reflecting steady demand from households and small entrepreneurs.
Not all sectors shared in the upswing, however. Credit to manufacturing declined by 8.2 percent, suggesting cautious borrowing or slower activity in some industrial segments.
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Even so, personal loans, largely extended to micro, small and medium-sized enterprises (MSMEs), remained the backbone of private sector lending, accounting for 35.8 percent of total credit. They were followed by trade at 15.3 percent and agriculture at 13.2 percent, underscoring the central role of household-based enterprises and commerce in Tanzania’s credit market.
Looking ahead, the Bank of Tanzania expects continued growth in private sector credit to support production, employment and investment, reinforcing the country’s positive growth outlook. With inflation contained within the single-digit 3 to 5 percent target range and lending rates easing slightly, borrowing conditions are projected to remain broadly supportive in the near term.
