Bank of Tanzania's 1 trillion loan facility for agricultural growth

TLDR

• DODOMA: The Bank of Tanzania’s (BoT) decision to introduce a special 1tri/- loan facility for banks and other financial institutions for on-lending at only 3 per cent per annum in 2021 has stimulated growth in the.
• When the BoT introduced the policy measures to promote credit to the private sector and lower interest rates, which took effect on July 27, 2021, it said the aim was to increase liquidity in banks and reduce lending.
• It was part of the government’s efforts to lessen impact of the COVID pandemic on economic activities and promote growth since the pace of growth slowed to 4.8 percent in 2020 from 7 percent in the preceding year.
• The measures were introduced in accordance with the Bank of Tanzania Act, Cap. 197, and the National Payment Systems Act, Cap. 437, which provides the legal framework for the Central Bank to issue additional directives.
• The fiscal policy was made after it was learned that the interest rates on loans charged by banks had remained high, at about 17 percent, despite monetary expansion and other measures adopted.