In March 2025, Tanzania’s financial system experienced a moderate tightening in borrowing conditions, with the overall lending rate rising to 15.50%, up from 15.14% in February 2025. Short-term loans (up to 1 year) averaged 15.83%, while medium-term loans (1–3 years) rose above 16%, reflecting higher credit risk pricing. In contrast, negotiated lending rates for prime borrowers declined to 12.94% from 13.42%, indicating competitive conditions for low-risk clients. On the deposit side, returns eased due to improved liquidity, with the 12-month deposit rate dropping sharply to 8.14% from 9.48%, and the negotiated deposit rate falling to 10.35% from 11.40%. Consequently, the interest rate spread widened to 7.69 percentage points, compared to 6.29 points in February, highlighting growing bank profit margins and a cautious credit outlook.

1. Lending Interest Rates (TZS Loans)

Interpretation: Lending rates rose slightly across most loan durations in March 2025, reflecting cautious pricing due to liquidity costs and credit risk. However, negotiated rates (for prime borrowers) declined, indicating banks' willingness to offer competitive rates to low-risk clients.

2. Deposit Interest Rates (TZS Deposits)

Interpretation: Deposit rates declined slightly, particularly the 12-month and negotiated deposit rates, due to improved liquidity conditions in the banking system, reducing banks' need to compete for deposits.

3. Short-Term Interest Rate Spread

• The interest rate spread (difference between short-term lending and deposit rates) widened to 7.69 percentage points in March 2025, from 6.29 in February and 7.23 in March 2024.

Implication: A widening spread suggests improved bank profitability on new lending, but may also imply tighter borrowing conditions for depositors.

In March 2025, lending interest rates slightly increased, while deposit rates softened due to ample liquidity. The negotiated lending rate dropped to 12.94%, showing room for favorable terms for low-risk borrowers. These trends reflect active monetary management and a stable credit environment.

What the Figures Tell Us

1. Borrowing Costs Are Slightly Rising

• The overall lending rate increased from 15.14% in February to 15.50% in March 2025.
• Rates for short- and medium-term loans also rose.
• 👉 This suggests that banks are charging more for credit, possibly due to:
  • Inflation expectations,
  • Higher demand for credit,
  • Or cautious risk pricing.

2. Preferred (Low-Risk) Borrowers Still Get Better Deals

• The negotiated lending rate fell from 13.42% to 12.94%.
• 👉 This means banks are competing more for large or safe borrowers, such as corporates or government clients, by offering lower rates.

3. Depositors Are Getting Lower Returns

• Deposit rates fell slightly:
  • 12-month deposit rate dropped from 9.48% to 8.14%.
  • Negotiated deposit rate declined from 11.40% to 10.35%.
• 👉 This indicates that banks are less pressured to attract new deposits, thanks to improved liquidity in the system.

4. Wider Interest Rate Spread = Higher Bank Profit Margins

• The interest rate spread (gap between lending and deposit rates) increased to 7.69% in March from 6.29% in February.
• 👉 A higher spread often means better margins for banks, but it also signals higher borrowing costs for the public compared to the returns they earn from savings.

Overall Interpretation

The data shows a stable but cautious banking environment in Tanzania. Banks are raising lending rates slightly to manage risks and inflation, while lowering deposit rates as liquidity improves. However, prime borrowers still enjoy favorable terms, and banks are earning more from the gap between what they pay and what they charge.

Mobile banking in Tanzania has experienced significant fluctuations over the past five years. The number of subscribers dropped by 17.77% in 2021 but rebounded strongly in 2022 with a 64.30% increase, reaching 7.92 million users. Active users followed a similar trend, peaking at 2.65 million in 2024 after a 50.91% rise in 2023. The volume of transactions showed remarkable growth in 2024, surging by 76.04% to 144.34 million transactions, reflecting increasing trust in mobile banking. Despite a decline in transaction value in 2023 (-16.78%), it recovered in 2024, reaching TZS 29.92 trillion (+17.32%), signaling renewed confidence in digital financial services. These trends highlight the evolving landscape of mobile banking and its role in financial inclusion in Tanzania.

Analysis of Mobile Banking Trends in Tanzania (2020–2024)

1. Number of Subscribers

• The number of mobile banking subscribers fluctuated, decreasing from 5.86 million in 2020 to 4.82 million in 2021 (-17.77%), before recovering significantly in 2022 to 7.92 million (+64.30%).
• Growth continued in 2023 (8.99 million, +13.47%) and 2024 (9.48 million, +5.41%), indicating a steady increase in mobile banking adoption.

2. Active Users

• Active users followed a similar trend, dropping from 1.48 million in 2020 to 1.24 million in 2021 (-16.27%), then rebounding in 2022 to 1.62 million (+30.78%).
• The highest increase occurred in 2023 (2.45 million, +50.91%), reflecting strong user engagement. In 2024, growth slowed but remained positive (2.66 million, +8.43%).

3. Volume of Transactions

• The number of transactions increased from 59.23 million in 2020 to 71.45 million in 2021 (+20.63%), and further to 92.13 million in 2022 (+28.93%).
• However, there was a decline in 2023 (81.99 million, -11.00%), before a major rebound in 2024 (144.34 million, +76.04%).

4. Value of Transactions (TZS Million)

• The total transaction value surged from TZS 15.23 trillion in 2020 to TZS 24.97 trillion in 2021 (+64.00%), and further to TZS 30.65 trillion in 2022 (+22.74%).
• A dip occurred in 2023 (TZS 25.51 trillion, -16.78%), followed by recovery in 2024 (TZS 29.92 trillion, +17.32%).

Key Takeaways

• Subscriber Growth: Recovery after the 2021 decline suggests increasing confidence in mobile banking services.
• Active Users: The 2023 surge (+50.91%) highlights efforts to boost engagement, possibly through digital financial initiatives.
• Transaction Volume: A sharp rebound in 2024 (+76.04%) signals a renewed push for digital transactions.
• Transaction Value: Despite a temporary decline in 2023, the upward trend in 2024 suggests strengthening mobile banking adoption.

Mobile Banking Trends in Tanzania (2020–2024)

Key Insights

1. Subscriber Growth:
   • A decline in 2021 (-17.77%) but a strong recovery in 2022 (+64.30%).
   • Moderate growth in 2023 (+13.47%) and 2024 (+5.41%).
2. Active Users:
   • Dropped in 2021 (-16.27%), then rebounded in 2022 (+30.78%) and 2023 (+50.91%).
   • Growth slowed in 2024 (+8.43%), indicating stabilization.
3. Volume of Transactions:
   • Increased from 2020 to 2022, peaking at 92.13 million in 2022.
   • A drop in 2023 (-11.00%) was followed by a major increase in 2024 (+76.04%).
4. Value of Transactions:
   • Peaked at TZS 30.65 trillion in 2022 but declined in 2023 (-16.78%).
   • Recovery in 2024 (TZS 29.92 trillion, +17.32%) suggests growing trust in digital financial transactions.