01 — OverviewExecutive Summary
Tanzania's headline "overall lending rate" of 15.20% in June 2026 hides a much wider reality. Rates vary sharply by loan term — from 15.38% on short-term facilities to a striking 17.03% on 1–2 year medium-term loans, the most expensive tenor on the curve. Borrowers who can negotiate — typically larger, well-collateralised corporates — pay just 11.93%, more than three percentage points below the standard rate.
On the deposit side, ordinary savings accounts still pay only 2.90%, while locking money into a 12-month time deposit earns 9.72% — comfortably ahead of June's 4.0% headline inflation, meaning term depositors are currently earning a solidly positive real return. The overall lending–deposit spread widened to 5.66 percentage points in June, and the gap between what a shilling loan costs (15.20%) and what a US-dollar loan costs (9.03%) has grown to roughly 6.2 percentage points — a structural incentive toward dollarisation that carries its own currency risk. Zooming out, the 2018–2025 trend shows long-term lending rates falling steadily while deposit rates crept up, meaning the spread that has historically rewarded Tanzanian banks has been quietly compressing for the better part of a decade.
- Term structure is humped, not flat: 1–2 year loans are priced above both short-term and long-term facilities — an unusual, worth-watching feature of the curve.
- Negotiating power is worth over 3 percentage points: the gap between negotiated (11.93%) and standard (15.20%) lending rates.
- Term deposits beat inflation; savings accounts barely register: 12-month deposits (9.72%) vs savings accounts (2.90%) vs inflation (4.0%).
- Dollarisation incentive is widening: FX loans cost ~6.2pp less than shilling loans, up from a narrower gap a year ago.
- The historical spread has halved: from roughly 8.6pp in 2018 to 4.8pp in 2025 on long-term lending vs 12-month deposits.
Before you go further — the bigger picture
Interest rates are one lever in a much larger structural story. For the policy gaps standing between Tanzania's current growth path and its Dira 2050 ambitions, read TICGL's flagship analysis.
Read: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050 →This piece complements TICGL's Tanzania Financial Markets Review — June 2026, which covers government securities auctions, the interbank cash market and the CBR policy path in full. Read the two together for the complete money-market-to-retail-rate picture.
02 — Core FocusLending Rates: The Real Cost of Borrowing in Tanzania
Commercial banks price loans very differently depending on tenor and the borrower's negotiating position. The overall lending rate is a blended average that obscures both dimensions.
Lending Rates by Category
| Category | Dec-25 | Mar-26 | Jun-26 | Chg. Dec–Jun (pp) |
|---|---|---|---|---|
| Overall lending rate | 15.24 | 15.11 | 15.20 | -0.04 |
| Short-term (up to 1 year) | 15.46 | 15.45 | 15.38 | -0.08 |
| Medium-term (1–2 years) | 16.42 | 16.53 | 17.03 | +0.61 |
| Medium-term (2–3 years) | 15.43 | 15.31 | 15.19 | -0.24 |
| Long-term (3–5 years) | 14.29 | 13.95 | 14.38 | +0.09 |
| Term loans (over 5 years) | 14.61 | 14.30 | 14.03 | -0.58 |
| Negotiated lending rate | 12.38 | 12.21 | 11.93 | -0.45 |
The 1–2 year band is the odd one out: it rose 0.61pp between December and June while every other tenor except long-term (3–5yr) eased or stayed flat. This "hump" likely reflects bank asset-liability mismatch and elevated perceived risk on medium-term SME and working-capital facilities. Source: BOT Table A4.
03 — Core FocusDeposit Rates: What Savers Actually Earn
Deposit rates rise sharply with tenor. Ordinary savings accounts remain the weakest way to earn on shillings held at a bank — the reward for locking funds into a term deposit is substantial.
Deposit Rates by Category
| Category | Dec-25 | Mar-26 | Jun-26 |
|---|---|---|---|
| Savings deposit rate | 3.02 | 2.89 | 2.90 |
| 1-month deposit | 9.35 | 8.65 | 8.62 |
| 2-month deposit | 9.34 | 9.34 | 9.84 |
| 3-month deposit | 9.70 | 9.56 | 9.96 |
| 6-month deposit | 9.96 | 10.51 | 10.46 |
| 12-month deposit | 9.58 | 9.60 | 9.72 |
| 24-month deposit | 7.21 | 7.03 | 7.91 |
| Overall time deposit rate | 8.36 | 8.33 | 8.60 |
| Negotiated deposit rate | 11.66 | 11.57 | 11.17 |
The 6-month tenor now pays more (10.46%) than the 12-month tenor (9.72%) — an inverted deposit curve that rewards savers for medium-term rather than long-term commitment. Source: BOT Table A4.
04 — Core FocusThe Lending–Deposit Spread
The spread between what banks charge borrowers and what they pay depositors is a rough gauge of banking-sector margin and, over time, of financial-sector efficiency.
Lending–Deposit Spread
The BOT's own short-term interest spread widened from 5.22pp in May to 5.66pp in June 2026, driven mainly by one-year lending rates moving relative to deposit rates. TICGL's broader overall-rate spread tells a similar story, hovering near 6.6–6.9pp through most of the year. Source: BOT Table 2.4.1 (official spread); TICGL calculation from Table A4 (overall spread).
05 — Related AngleShilling vs Foreign-Currency Rates
Tanzanian banks also lend and take deposits in foreign currency (mostly US dollars), at rates far below shilling rates — a gap that shapes corporate borrowing decisions and, at the margin, dollarisation pressure in the banking system.
Overall Lending Rate: Shilling vs Foreign Currency
Overall Time Deposit Rate: Shilling vs Foreign Currency
| Rate | TZS | Foreign currency | Gap (pp) |
|---|---|---|---|
| Overall lending rate | 15.20 | 9.03 | 6.17 |
| Overall time deposit rate | 8.60 | 4.30 | 4.30 |
| Savings deposit rate | 2.90 | 1.64 | 1.26 |
Cheaper FX-denominated borrowing is a real and widening gap, but it shifts currency risk onto the borrower. This page is analytical, not financial advice — any FX borrowing decision should weigh the shilling's exchange-rate outlook and be reviewed with a licensed financial or treasury advisor.
06 — Long ViewThe 2018–2025 Trend: A Decade of Spread Compression
Zooming out from monthly moves, the structural story is one of gradually falling long-term lending rates against modestly rising deposit rates — a slow compression of banking-sector margins on longer-tenor business.
12-Month Deposit Rate vs Long-Term Lending Rate (3–5 years)
| Year | 12-month deposit rate | Long-term lending rate (3–5yr) | Implied spread (pp) |
|---|---|---|---|
| 2018 | 8.8 | 17.4 | 8.6 |
| 2019 | 8.8 | 16.6 | 7.8 |
| 2020 | 8.3 | 16.2 | 7.9 |
| 2021 | 8.3 | 16.0 | 7.7 |
| 2022 | 8.5 | 15.7 | 7.2 |
| 2023 | 8.7 | 15.6 | 6.9 |
| 2024 (revised) | 9.2 | 15.3 | 6.1 |
| 2025 (provisional) | 9.6 | 14.4 | 4.8 |
The implied long-term spread has nearly halved since 2018 — from 8.6 percentage points to 4.8 — as deposit rates rose almost a full point while long-term lending rates fell three points. That is a genuine structural easing in the cost of long-term shilling credit, even though June 2026's monthly data shows short-term dynamics moving the other way. Source: BOT Table A1.
07 — TICGL ViewWhat This Means for Borrowers, Savers and Banks
For borrowers
The gap between negotiated (11.93%) and standard (15.20%) rates is worth actively pursuing — relationship banking, stronger collateral and multi-product relationships with a lender can be worth over 3 percentage points a year. Businesses considering 1–2 year facilities should note this is currently the most expensive tenor on the curve and may want to explore restructuring toward shorter or longer terms.
For savers & treasurers
Idle shillings in a savings account are earning barely above zero in real terms once inflation is considered fairly (2.90% nominal). Moving surplus cash into 6-month or 12-month time deposits captures materially higher, currently inflation-beating returns (9.72%–10.46%), with limited additional liquidity cost for funds not needed short-term.
For banks & policymakers
The widening TZS–FX lending gap (6.17pp) is a structural pressure point: it incentivises dollarisation of corporate balance sheets even in a period of currency stability. The unusual pricing hump at the 1–2 year lending tenor also merits attention — it may reflect a genuine gap in medium-term risk-sharing instruments (e.g. partial credit guarantees) that development finance institutions could help fill.
- Overall lending rate: 15.20% (June 2026); negotiated rate: 11.93% — a 3.27pp "prime borrower" discount.
- The most expensive lending tenor is 1–2 years (17.03%), not the longest-dated facilities.
- 12-month deposits (9.72%) comfortably beat June's 4.0% inflation; ordinary savings accounts (2.90%) barely do.
- The official lending–deposit spread widened to 5.66pp in June, from 5.22pp in May.
- FX loans are roughly 6.2 percentage points cheaper than shilling loans — a widening dollarisation incentive.
- Over 2018–2025, the long-term lending–deposit spread nearly halved, from 8.6pp to 4.8pp.
08 — Quick AnswersFrequently Asked Questions
What is Tanzania's average bank lending rate in 2026?
The overall commercial bank lending rate was 15.20% in June 2026, down slightly from 15.32% in May. Negotiated rates for prime borrowers were far lower, at 11.93%.
What is the interest rate on savings accounts in Tanzania?
The average savings deposit rate was 2.90% in June 2026, largely unchanged over the past year. Time deposits pay considerably more — 8.60% overall, and 9.72% for 12-month deposits.
Why is foreign-currency borrowing cheaper than shilling borrowing in Tanzania?
In June 2026 the overall FX lending rate was 9.03% versus 15.20% for shilling lending — a gap of about 6.2 percentage points, reflecting lower global hard-currency funding costs, though it shifts exchange-rate risk onto unhedged borrowers.
Are real interest rates positive for savers in Tanzania in 2026?
Yes, for term deposits. With inflation at 4.0% and the 12-month deposit rate at 9.72% in June 2026, term depositors earned a real return of roughly 5.7 percentage points. Savings accounts, at 2.90%, offered a much thinner real return.
09 — MethodologySources & Notes
- All figures are compiled from the Bank of Tanzania, Monthly Economic Review, July 2026 (data as of June 2026), including Tables A1, A4 and 2.4.1.
- Percentage-point gaps, real-return estimates and the "TICGL overall spread" series are calculated by TICGL Research from the underlying BOT figures for reader convenience and are clearly labelled as such.
- 2024 and 2025 annual figures in the historical table are marked revised/provisional by the BOT and may be updated in later publications.
- This page is an independent analytical summary prepared by TICGL/TERI and does not constitute financial or investment advice. Readers making borrowing, savings or currency decisions should consult a licensed advisor and the original BOT publication.
Muhtasari kwa Kiswahili
Kiwango cha wastani cha riba ya mikopo Tanzania kilikuwa asilimia 15.20 mwezi Juni 2026, lakini riba halisi hutofautiana sana kulingana na muda wa mkopo. Mikopo ya kati (miaka 1–2) ndiyo ya gharama zaidi kwa asilimia 17.03, ikizidi hata mikopo ya muda mrefu. Wakopaji wanaoweza kujadiliana masharti hulipa riba iliyopunguzwa hadi asilimia 11.93 — punguzo la zaidi ya pointi 3 kwa mwaka.
Kwa upande wa akiba, akaunti za kawaida za akiba zinalipa riba ndogo ya asilimia 2.90 tu, wakati amana za muda (fixed deposits) za miezi 12 zinalipa asilimia 9.72 — kiwango kinachozidi mfumuko wa bei wa asilimia 4.0 uliorekodiwa Juni 2026, hivyo kutoa faida halisi chanya kwa waweka akiba wa muda maalum.
Pengo kati ya riba ya mikopo na amana (lending–deposit spread) liliongezeka hadi pointi 5.66 mwezi Juni, kutoka pointi 5.22 mwezi Mei. Aidha, mikopo ya fedha za kigeni (kama dola) ina gharama nafuu zaidi — asilimia 9.03 tu ikilinganishwa na asilimia 15.20 ya mikopo ya shilingi — jambo linaloweza kuwavutia wakopaji kutumia fedha za kigeni, ingawa hubeba hatari ya mabadiliko ya thamani ya sarafu. Kwa muda mrefu (2018–2025), pengo hili kati ya riba ya mikopo ya muda mrefu na amana za miezi 12 limepungua kwa kiasi kikubwa, kutoka pointi 8.6 hadi pointi 4.8.
- Riba ya wastani ya mikopo: asilimia 15.20 (Juni 2026)
- Riba ya mikopo iliyojadiliwa (negotiated): asilimia 11.93
- Riba ya amana ya miezi 12: asilimia 9.72
- Riba ya akaunti za akiba: asilimia 2.90
Chanzo: Benki Kuu ya Tanzania (BOT), Monthly Economic Review, Julai 2026. Uchambuzi huu umeandaliwa na Idara ya Utafiti ya TICGL / Tanzania Economic Research Institute (TERI).