DAR ES SALAAM, Sept. 10 -- THE banking sector has undergone a profound transformation since 2020, with both credit and deposits expanding at double-digit rates, underscoring robust financial deepening but also raising questions about liquidity management.

According to the Bank of Tanzanias Depository Corporations Survey, extended broad money supply (M3) nearly doubled in five years, rising from 29.9tri/- in December 2020 to 55.5tri/- this June.

Analysts say the growth has been underpinned by a surge in deposits, reflecting increased public confidence in the formal financial system as well as broader economic recovery from the pandemic.

Despite the strong growth, liquidity indicators are tightening.

Kelvin Msangi, a researcher and fina...