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Loans Bad Credit Online – Tanzania: Financial Sector Robust Under Magufuli’s Stewardship | Fintech Zoom



Loans Bad Credit Online – Tanzania: Financial Sector Robust Under Magufuli’s Stewardship

WHEN compared to the rest of the world, particularly developing nations, the stock of banks credit to the private sector, mostly non-financial public enterprises has been facing challenges to access adequate financial services and adequate capital to meet their own expectation.

In my opinion, this reflects low financial intermediation as degree by the ratio of broad money to GDP, the level of marketable bank credit to the private sector, and the existence of key institutional and legal infrastructure that not only ensure value for money, but help to reduce the cost of financial transactions and moderates the financial cost of commercial banks and other financial institutions in providing affordable credits.

In examining the ratio of banks credit to the private sector over the last few years, a key determinant in my view to think through is often the government insufficiency and the amount of financing that the government is looking for from the banking system.

Government deficits that have to be financed by domestic resources provide an opportunity for the banking system to push funds into relatively safer investment outlets than credit to the private sector, and this in my opinion has the capacity to raise lending rates, and decrease the amount of resources channelled to private sector credit.

Those cognizant on how credit market and economy are connected recognize well in what way broad money supply M2 to GDP ratio may not tell the complete story of how financial development can contribute to economic growth via the supply of credit to private forms.

Hence banks credit to non-financial private sector enterprises and the manner in which financial markets operates is sometimes viewed as a better measure of how financial deepening impact on economic growth.

As Tanzanians celebrate the life, the commitment and the success of the late Dr JPM, it is important to acknowledge his stand on the relationship between financial development and economic growth among the areas he wanted to see value for money being made.

The late Dr JPM knew development of the financial sector is an inseparable aspect of economic growth in the modern economy, the level and speed of economic growth, that in my opinion define the scope and programme he had in mind for Tanzanians.

This commentary intends to contribute to the consideration of how financial development was seen as key to stimulate and support economic growth in Tanzania that was major concern during JPM’s time on how to expend every penny to be successfully used in projects that would spur multiplier economic effects to Tanzanians.

While many would argue that the financial sector performance and healthy value for money strategies under the late JPM, has not only brought the real economy of Tanzania to the world fast growing economies, there is now a considerably clear clarity about what the positive contribution of the financial sector was like during his time as the President of Tanzania.

This commentary admits twenty one days period on grieving the demise of our loved President Dr JPM focuses on the financial sector and healthy value for money strategies in the financialisation of the Tanzanian economy and banking industry.

Clearly, much as many might have diverse views, under the late Dr JPM, the government had a rather more active role on ensuring value for money and effective use of financial resources were destined to serve Tanzanians than most observers may have acknowledged.

Successful governments since the demise of the late Mwalimu Nyerere, played a big role, however, the late Dr JPM handed much of financialisation of the Tanzanian economy’s financial sector effectively linked to the rising power of the treasury and its reshaping mechanisms ideal to economic policy image to help propel the economy of Tanzania on the interest of Tanzanians.

My interpretation on the contribution of the financial sector and healthy value for money strategies under the late Dr JPM, nonetheless, at bigger picture look into what role did JPM’s government played in the rise of financialisation in Tanzania and importantly what were the institutional mechanisms by which financialisation came to help his plans to be implemented.

A major concern of governments in Africa is that their banking system aren’t providing enough support to new economic initiatives and the expansion of small-and medium-scale enterprises and agriculture. Dr JPM understood that faster economic growth will not be possible without a deepening of the strong financial system, and in particular, more support from the banking system.

I might differ to the late Dr JPM’s detractors, on one strong point of view. Looking into how he accomplished during his term before his demise and the manner in which he managed resource mobilisation, without doubt knew a strong financial system will mop up funds from the informal sector and ensure that idle funds are put to optimal use in the formal financial system to help fund mega projects Tanzania needed for its people.

He strongly knew the risks, consequences and ability to absorb larger amounts of external financial assistances. Dr JPM in my opinion knew financial development should be treated as the most important dimension of economic development, as it leads to not just financial investment, but also investment in social and economic substructures and investment in human resources, as it enables increase in the skills and expert level of the work force.

There is no doubting the financial sector performance during his time had strong financial strategies ahead and financial discipline and groundwork created seeking value for money, will in my view, have a substantial effect on the economy of Tanzania stirring forward.

To non-economists, and for the sake of clarity to help appreciate issues discussed in this celebration of the life the late Dr JPM, financialisation is a process whereby financial markets, financial institutions and financial leaders help to set plans that help to grow economy.

Financialisation renovates the functioning of economic system at both the macro and micro levels. Most obviously is about the growth of financial markets to both the state and real productive economy of goods and services. During the late Dr JPM’s reign, while walking his talk, in fulfilling the ruling CCM manifesto, the capital managed by banks, and the ability to create credit to private sector, in my view grew substantially compared to the state expenditure.

Clearly, seeing through BoT data on economic performance and assessment, in my view, stock, bond, commodity, commercial real estates, and currency market grew significantly. Without going into details, the spread of financialisation during the late JPM’s presidency term went wider and deeper, as many economic undertakings in households and for the private sector are reshaped to serve financial market needs and vis. versa.

Although Tanzania has had a strong financial sector, thanks to good management and monitoring offered by the central bank of Tanzania, from 2015-to the time Tanzanian lost its strong and visionary leader Dr JPM, already investment in financial services was argued to be growing destined to service private sector seen as engine of the economy.

Certainly under the late Dr JPM, Tanzania didn’t lock its economic activities during the height of global Covid-19 and subsequent variant pandemic, Tanzania financial industry and the economy as whole enjoyed faster growth relatively than all its economic rivals in the region and within sub-Sahara Africa. Between 2015 to early 2021, Tanzania manufacturing sector, export of traditional and non-traditional commodities, employment etc according to BoT monthly economic review for the period indicates that the economy is positioned to do better than its peers in the region.

In terms of hard fiscal and regulatory measures, during the late Dr JPM’s presidency, in my opinion the treasury made a series of changes which in my view were designed to free up markets generally and to benefit financial market to serve Tanzania industrialist better.