Liberalization of the financial sector and credit growth: a case study of Zanzibar.

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University of Dar es Salaam
The main objective of this study was to empirically examine the financial sector liberalization and credit growth in Zanzibar Specially, it examined the relationship between sector affecting credit growth and some determinants of credit growth in Zanzibar. The study has been conducted in Zanzibar. Selected cases of commercial banks have been examined, documentary review and interviews were the main data collection methods. Resident individuals private company and government officials have been interviewed. The conclusion coefficients were used to discuss the relationships between credit growth and lending late as well as deposits using statistical package for Social scientists ( SPSS ). The results show that liberalization of financial sector has been encouraged inflow of commercial banks in Zanzibar as well as lowering lending rate and an increase of deposit. Perceived level of deposits was found to have a significant positive influence on credit growth however, lending rate was not an important factor of credit growth in Zanzibar. Other factor such as Islamic beliefs, collateral, limited market opportunity, bureaucracy and credit awareness, were also found to be an important factor on credit growth. It implies that restructuring policy and legal requirements such as initiating market opportunities for product/ services, simplifying procedures to start and run business, creating awareness on availability of credit is necessary. It is in this view, the study proposed interaction of both government and commercial banks to create a conductive environment to credit growth.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HF1379.K3)
Free trade, Financial sector, Credit growth, Zanzibar
Katema, F (2005) Liberalization of the financial sector and credit growth: a case study of Zanzibar.Master dissertation, University of Dar es Salaam, Dar es Salaam.