The Bank of Tanzania (BoT) released the Tanzania Financial Stability Report for December 2025 in May 2026, showing that the country’s financial system remained stable and resilient through 2025, with several sub-sectors recording double-digit expansion and the banking industry’s non-performing loans (NPLs) ratio falling to the lowest level in the East African Community.
The Tanzania Financial Stability Report is published annually by the Bank of Tanzania to evaluate the soundness of the financial system and identify potential systemic risks.
Total financial system assets reached TZS 109,914.8 billion at the end of 2025, equivalent to 49.2% of GDP, up 24.0% from TZS 88,673.6 billion in 2024.
The Financial System Stability Index (FSSI) improved to 0.3 in December 2025 from 0.2 in December 2024, signalling that the system is resilient to short-term vulnerabilities.
Banks representing 70.0% of total system assets, social security 23.6%, open-ended collective investment schemes 4.0%, and insurance 2.4%.
Banking Sector
The banking sub-sector recorded the strongest expansion, with total assets growing 23.8% to TZS 76,975 billion in 2025, well above the 14.6% increase posted in 2024.
The growth was driven by loans, advances and overdrafts, which reached TZS 45,549.0 billion and accounted for 59.2% of total banking assets, and by investments in debt securities, which rose to TZS 9,741.7 billion.
Asset quality strengthened further, with the gross non-performing loans (NPLs) ratio falling to 2.8% in December 2025 from 3.3% a year earlier, well below the 5.0% regulatory threshold and the lowest in the EAC, ahead of Rwanda at 2.9%, Uganda at 3.1%, Burundi at 3.9%, and Kenya at 14.1%.
Capital and liquidity buffers remained above regulatory requirements, with Common Equity Tier 1 capital at 18.3% against a minimum of 8.5%, total capital adequacy at 19.7% against a 12.0% threshold, the Liquidity Coverage Ratio at 219.2% and the Net Stable Funding Ratio at 153.9%, both above the 100.0% minimum.
Return on assets stood at 4.7% and return on equity at 20.6%, while the non-interest expense to gross income ratio improved to 35.8%, reflecting sustained operational efficiency.
Customer deposits increased to TZS 51,432.1 billion in December 2025 from TZS 40,712.3 billion a year earlier.
Private Sector Credit
Credit to the private sector accelerated sharply, with annual growth strengthening to 23.5% in December 2025 from 12.4% in December 2024.
The fastest expanding economic activities were mining and quarrying at 30.1%, trade at 29.4%, agriculture at 27.0%, building and construction at 22.4%, and transport and communication at 22.1%.
The share of personal loans in total bank lending fell to 35.4% from 37.2%, while the share of loans to trade and agriculture rose to 15.1% and 13.0% respectively, indicating that funds are increasingly being channelled to productive activities.
The interest rate spread between lending and deposit rates narrowed to 6.9% in December 2025 from 7.4% a year earlier, supported by improved liquidity conditions in the banking system.
Mortgages and Real Estate
The residential mortgage market expanded by 14.2% in 2025, with total outstanding mortgage debt issued by banking institutions reaching TZS 752 billion in December 2025.
Occupancy rates for commercial buildings remained above 80% in most major cities, with Dodoma and Mbeya registering full occupancy and Dar es Salaam showing a steadily rising trend supported by foreign direct investment inflows and ongoing infrastructure development.
Capital Markets
The total value of investment in the capital markets increased by 35.1% to TZS 63,096.4 billion in 2025, with all asset classes recording growth.
The value of equities listed at the Dar es Salaam Stock Exchange (DSE) rose 34.3% to TZS 23,995.3 billion, government bonds increased to TZS 32,724.8 billion, corporate bonds expanded to TZS 1,969.9 billion, and the Net Asset Value of Collective Investment Schemes jumped 63.0% to TZS 4,384.4 billion.
Total equity turnover at the DSE nearly tripled to TZS 659.0 billion in 2025 from TZS 228.6 billion a year earlier.
The Tanzania Share Index (TSI) gained 1,141 points to close at 5,759.4 points, while the All Share Index (DSEI) rose 622 points to 2,761.9 points, supported by share price gains in DSE, CRDB, NMB, MKCB, MBP, NICO, and cross-listed companies EABL, KCB and JHL.
Local investors dominated activity, accounting for 84.1% of buy-side and 57.8% of sell-side transactions.
Several oversubscribed bond issuances were completed during the year, including CRDB Bank Plc’s Multicurrency Al Barakah Sukuk, which raised TZS 125.4 billion against a TZS 30 billion target (418% success rate) and USD 32.3 million against a USD 5 million target (646% success rate), Tanzania Commercial Bank’s Stawi Bond, which raised TZS 140.24 billion against a TZS 50 billion target (281%), and Stanbic Bank Tanzania’s corporate bond, which raised TZS 40.2 billion against a TZS 35 billion target (114.9%).
Insurance and Social Security
The insurance sub-sector’s total assets rose 6.8% to TZS 2,633.6 billion in 2025, supported by higher gross written premiums across general, life, health, takaful, and foreign inward reinsurance lines.
The social security sub-sector recorded the second strongest growth in the financial system, with total assets rising 21.4% to TZS 25,921 billion, driven by member contributions and investment returns.
Regulatory Developments
Tanzania was removed from the Financial Action Task Force (FATF) grey list on 13 June 2025, following two years of reforms to strengthen anti-money laundering and counter-terrorist financing frameworks.
The BoT introduced the Emergency Liquidity Assistance (ELA) Framework in September 2025, providing a clear mechanism for short-term funding to solvent banks facing temporary liquidity stress.
Basel II and III reporting began in April 2025, and the Tanzania Financial Stability Forum signed a revised Memorandum of Understanding on 8 July 2025 to broaden institutional collaboration on systemic risk.
In coordination with the Tanzania Communications Regulatory Authority, the BoT blocked more than 13,520 unlicensed online loan platforms and prosecuted over 25 unlicensed providers during the year.
The Capital Markets and Securities Authority approved amendments to the DSE Trading Rules covering block trades, single lots, price cap limits, closing price determination, corporate action price discovery, DSE operating hours, and the use of the National Identification Number as a sole identification document.
Risk Outlook
The BoT identified the principal external risks to financial stability as global geopolitical tensions, trade protectionism, supply chain disruptions, climate-related shocks, and cybersecurity threats.
A dedicated box in the report assesses the financial stability implications of the US-Israel war with Iran, which began on 28 February 2026 with strikes targeting Iranian nuclear and energy facilities and the effective closure of the Strait of Hormuz, through which around 20% of global crude oil and liquefied natural gas transits.
Tanzania imports more than 60% of its oil from the Middle East, with the United Arab Emirates accounting for 50.1%, and 23.4% of its fertilizer from Saudi Arabia and 4.8% from Qatar and Oman, exposing the economy to imported inflation, exchange rate pressure and pressure on the manufacturing, agricultural, tourism and insurance sectors.
The crude oil price has risen from around USD 67 per barrel in 2025 to around USD 107.8 per barrel by the end of March 2026, while the gold price reached USD 4,557.80 per troy ounce, providing a partial natural hedge for Tanzania as one of the country’s largest exports.
The Government is maintaining fuel reserves sufficient to cover three months of domestic demand.
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