FINANCIAL SECTOR MORE STABLE AS NPL's DROP

Finance and Planning Minister, Mwigulu Nchemba.

The financial sector has received a major respite as banks registered a significant drop in non-performing loans (NPLs), Finance and Planning minister, Mwigulu Nchemba said on Wednesday.

Outlining the milestones registered during President Samia Suluhu Hassan’s one year in office, Dr Nchemba said NLPs had decreased to 8.2 per cent from the initial 9.3 per cent. He attributed such a feat to the creditors’ ability to service their loans as a result of increased liquidity in the economy.

“Those who weren’t able to repay their outstanding loans are now able to do so,” the minister explained here on Wednesday.

The government, through the Central Bank had in the recent past been taking measures to stabilise the banking sector, including merging small banks with inadequate capital.

In March last year, NPLs in Tanzania stood at 9.36 per cent of the total loans, which was nearly twice the recommended threshold of 5 per cent.

According to Dr Nchemba, the reduction of NPLs follows President Samia’s directive on making payments on debts those owed by the government.

“The government was able to make to contractors and service providers who in turn repaid their loans,” he clarified.

Continue Reading > > >