Banks
Tanzania's banking sector expanded broad money supply (M3) by 25.8% year-on-year in 2025 to reach TZS 61,524.3 billion, with banks' credit to the private sector growing by about 17.6%.[8]
The Bank of Tanzania (BOT) confirms that the country's banking sector remained sound, well-capitalized and profitable through the financial year 2024/25, with all performance indicators staying firmly within prescribed thresholds.[1]
Strong credit growth, a stable shilling, low inflation and an interest rate-based monetary policy framework anchored by the Central Bank Rate (CBR) have positioned banks as a central engine of Tanzania's economic expansion and a primary channel for financing private investment.
Banking Sector Stability and Soundness
The BOT stresses that Tanzania's financial sector, which includes banks alongside social security schemes, insurance, capital markets and microfinance sub-sectors, remained sound and well-capitalized in FY 2024/25.[1]
Asset quality and profitability improved during the year, and the sector retained sufficient buffers to absorb both domestic and global shocks.
The Financial System Stability Index (FSSI), an early warning indicator that measures financial system stability, improved to 0.3 in June 2025 from 0.2 in the previous year.
This positive trajectory was driven by the sustained soundness of the banking sector, a favorable macroeconomic environment, and prudent risk management practices.
Non-financial corporates recorded robust growth marked by rising profitability, an improved credit profile and expanded access to finance, largely funded through retained earnings supplemented by domestic borrowing from banks.
Monetary Policy and the Central Bank Rate
In January 2024, the Bank of Tanzania introduced the Central Bank Rate (CBR) as part of its transition to an interest rate-based monetary policy framework.
The CBR was initially set at 5.5%, then raised to 6.0% in Q2 2024, before being lowered to 5.75% in Q3 2025.
The rate was maintained at 5.75% by the latest Monetary Policy Committee review in Q1 2026, to sustain economic recovery amid a low-inflation environment anchored within the 3-5% target range.
Inflation averaged 3.3% in 2025,[2] the lowest in the region compared to Kenya (3.9%) and Uganda (3.6%),[3] giving banks a stable price environment in which to extend credit.
In its latest foreign exchange intervention on 6 March 2026, the Bank sold USD 30 million in the Interbank Foreign Exchange Market (IFEM) through an auction at a weighted average exchange rate of TZS 2,575.45 per USD, providing liquidity for commercial banks operating in the FX market.
Money Supply and Private Sector Credit (2025)
Broad money supply (M3) grew by 25.8% year-on-year in 2025, reaching TZS 61,524.3 billion, largely driven by credit to the private sector.[8]
Banks' credit to the private sector expanded strongly by about 17.6%, indicating improved economic conditions and increased business confidence.
Credit growth was highest in the mining sector at 91.1% in December 2025, followed by trade and agriculture with growth rates of 49.7% and 28.9% respectively.
The increase in growth of credit to mining was attributed to measures taken by the Government to modernize the mining sector and enhance access to credit to artisanal and small-scale miners through flexible collateral.
Personal loans, predominantly extended to micro, small and medium-sized enterprises (MSMEs), constituted the largest share of private sector credit at 35.8%.
Financial Inclusion and Banking Penetration
In 2023, bank account ownership stood at 22% of the adult population,[5] showing significant headroom for further deposit mobilization by commercial banks.
The growth of fintech and mobile money services is driving financial inclusion across the country, with formal financial service usage rising to 76% in 2023 and mobile money penetration reaching nearly 90%.
In 2024, the Financial Inclusion Index (TanFiX) rose to 0.81 from 0.72 in 2023, reflecting expanded access points, improved digital product adoption, increased financial literacy and a supportive regulatory environment.[6]
The integration of banks as agents for insurance sales is expected to further enhance insurance penetration, which currently remains low at 2.08% despite the insurance market growing to TZS 1.52 trillion in premiums in 2024 from TZS 1.24 trillion in 2023.[7]
Foreign Reserves and External Buffers
Foreign reserves managed by the Bank of Tanzania rose to USD 6,329 million from USD 5,546.9 million over the respective periods.
This level was adequate to cover 4.9 months of projected imports, exceeding both national and East African Community (EAC) benchmarks.
The Tanzanian shilling traded at an average of TZS 2,452.76 per USD in December 2025, representing a slight annual depreciation of 1.3%,[4] giving banks a stable currency environment for cross-border lending and trade finance.
Investment Opportunities in Banking
Opportunities exist in digital banking, mobile payments, microfinance and insurance services, supported by rapidly expanding fintech adoption and rising formal financial service usage.
With bank account ownership at only 22% of adults in 2023,[5] there is substantial room to scale deposit-taking, agency banking and digital onboarding solutions targeted at the unbanked majority.
The 91.1% credit growth to mining and strong expansion in trade (49.7%) and agriculture (28.9%) in 2025 highlight high-demand lending verticals for both incumbent banks and new entrants, including specialized lenders serving artisanal and small-scale miners through flexible collateral structures.
MSME financing remains the single largest segment of private sector credit at 35.8%, pointing to scalable opportunities in SME banking, asset finance and credit scoring technology.
The integration of banks as agents for insurance distribution opens bancassurance as a structural growth channel, given current insurance penetration of only 2.08% in a market where premiums grew 22.6% to TZS 1.52 trillion in 2024.[7]
A stable shilling, inflation of 3.3% in 2025,[2] and a CBR held at 5.75% provide a predictable macro-financial backdrop for new bank capital, fintech partnerships and digital lending platforms targeting Tanzania's fast-growing population of 70 million.
Last Update: May 2026
References
- https://www.bot.go.tz/Publications/Regular/Annual%20Report/en/2026022607584561.pdf (Guide reference #1)
- https://www.nbs.go.tz/uploads/statistics/documents/en-1767868197-CPI%20Summary_122025.xls (Guide reference #10)
- https://www.nbs.go.tz/uploads/statistics/documents/en-1767868348-Inflation%20Rates%20for%20%20Neighboring%20Countries_122025.pdf (Guide reference #11)
- https://www.bot.go.tz/Publications/Regular/Monthly%20Economic%20Review/en/2026020312553210.pdf (Guide reference #12)
- https://www.fsdt.or.tz/wp-content/uploads/2023/07/FinScope-Tanzania-2023-Full-Report-Insights-that-Drive-Innovation.pdf (Guide reference #16)
- https://www.bot.go.tz/Publications/Regular/Annual%20Report/en/2026022607584561.pdf (Guide reference #17)
- https://www.tira.go.tz/uploads/documents/en-New%20Annual%20Insurance%20Market%20Performance%20Report%202024.pdf (Guide reference #18)
- https://www.bot.go.tz/Publications/Regular/Monthly%20Economic%20Review/en/2026021821282158.pdf (Guide reference #49)
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