Nsekela, who is also the chairman of the Tanzania Bankers Association, promised that banks will start lowering interest rates soon in line with revisited rates offered by the Bank of Tanzania to commercial banks.
He said loans given to the agriculture sector will now be charged nine per cent from 20 per cent earlier, while salary loans will be charged 13 percent, down from 16 percent.
“In good collaboration with the central bank which supervises the banking industry, end last year, we sat down and started a process of gauging new interest rates charged on different types of loans and we are happy that CRDB has finally come up with the latest rates,” he said.
CRDB Bank is taking the lead in lowering lending rates, he said, underlining that other banks and financial institutions will follow suit, “so that long term concerns by the public and the government should finally be brought to an end.”
He urged the public to seize the opportunity presented by the rates reduction, as sectors such as agriculture that is noted for its bad risk potential are now better off.
“Our objective is to speed up the agricultural revolution in the country by facilitating small and medium scale farmers adopt modern farming practices through access to affordable agro input and equipment loans,” he declared.
The CRDB chief further noted that agriculture, which contributes 26 per cent in the gross domestic product and employs some 75 percent of rural folks, has a big potential to transform the country’s economy.
CRDB has the largest loan portfolio in the agriculture sector where it controls about 40 percent of the market with over 1.6trn/- disbursed to the entire value chain so far. Lowered rates on salaried loans are also meant to give borrowers relief, hence contribute towards individual and family income stability.
“Employees are an important group of clients to our bank and that’s why we have been reducing rates charged on salaried loans annually,” he pointed out while stressing that reduced rates will also help the group attain its set goals this year.
Opening the financial institutions conference, President Samia urged BoT and commercial banks to work together and reduce interest rates charged on loans so that individuals and private companies can afford to repay on schedule while stimulating economic growth.